FHA Loans

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA).

These loans offer low down payment and gift options to help borrowers qualify for a home.

 

Advantages

  • Smaller down payment required (as low as 3.5%)

  • Allows for gift funds to help with closing costs and/or down payment

  • Allows for seller credit toward recurring and non-recurring closing costs

  • Great for first-time home buyers

  • Competitive interest rates

  • Minimum credit score not required (although lenders have their own requirements)

  • Allows higher debt to income ratios

Disadvantages:

  • Upfront mortgage insurance (UFMIP) ads to the loan balance

  • Monthly mortgage insurance (MI) increases overall payment

  • With less than 10% down payment, mortgage insurance is permanent

  • May have to refinance to remove mortgage insurance (even with sufficient equity)

  • Condominiums must be FHA approved

  • Property must be free of major electrical, structural or foundational issues

FHA Loan Checklist

When you’re applying for an FHA loan, the following list of documents will help expedite the process. We can help you understand any part of the FHA loan process so don’t hesitate to contact us with any questions.

Employment Info

Past two years’ completed tax returns.Past two years’ W-2s, 1099s and any other necessary tax forms.Most recent 30-day’s pay stubs.Self-employed borrowers may need three years’ tax returns and YTD Profit & Loss Statement.

Savings Info

Past two months’ full bank statements for all accounts.Most recent statements from investment accounts (retirement, 410k, mutual funds, etc.).

Personal Info

Driver’s License or other official state identification.Social Security Card.Any Divorce, Palimony, Alimony documents.Green card or work-permit (if/as applicable).