FHA Mortgage Loans – Old Town Lending

FHA Loans

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FHA Home Loans

Even with today's increasing home prices, lower income and first time home buyers can still afford to buy homes with the help of the Federal Housing Administration (FHA). These loans are government-backed, intended to minimize barriers to homeownership. With an FHA loan, lower income and first time home buyers have more flexibility than many other types of home loans.

About FHA Loans

Is This Loan for You?

Worried about income or credit score?
You may still have options and opportunities.

The FHA loan is often ideal for first-time home buyers and buyers with lower income and/or credit scores. The down payment for an FHA loan is just 3.5%, provided that you have a credit score of at least 580.

If your credit score falls between 500 and 579, you can still get an FHA loan with a 10% down payment.

Benefits

With a low down payment, the cost of homeownership should be much more affordable.

FUTURE HOMEOWNER: With the FHA government backed loan, the American dream of owning a home may be achievable for those with income and credit limitations.
LOW DOWN PAYMENT: You can obtain a FHA loan for as little as 3.5% down payment with a credit score of 580 or higher. However, borrowers with credit scores between 500 and 579 can qualify with a 10% down payment.
LOWER CREDIT SCORES WELCOMED: When it comes to your credit score, there are many factors that affect it. It’s entirely possible to get an FHA loan with a low credit score or poor credit history.
FLEXIBLE QUALIFICATIONS: Requirements for an FHA loan are more relaxed compared to other loans. Get a chance to start over after a financial setback, and still qualify for financing.

Loan Eligiblity

With lower down payment and flexible programs, your finances may stretch further.

Credit score of 500 or higher
Down payment which can be as little as 3.5%: in some cases with lower credit scores, the down payment will be 10%.
A moderate debt-to-income ratio: The FHA allows you to use 31% of your income towards housing costs and 43% towards housing expenses and other long-term debt.
Mortgage insurance: 1.75% upfront premium; 0.45% to 1.05% fee annually.
Primary Residence: The home you are purchasing must be your primary residence, not used for an investment home or secondary home (for a child, parent, friend, etc.).

FHA Home Loan FAQs

What kind of property can I purchase?

What kinds of houses qualify for an FHA home loan? The answer may surprise you since many people assume the types of homes they can buy are fully finished, typical suburban home. But you can purchase other types of properties, too. Do you know your options with an FHA loan?

FHA One-Time Close Construction Loans

How would you like to have a house built from the ground up instead of searching for just the right property as an existing construction property? This is possible, even for first-time home buyers, with an FHA One-Time Close construction loan.

This type of home loan may require higher FICO scores (depending on the lender) and may be limited (again, based on lender standards) to single-unit residences.

FHA Fixer-Upper Loans

You can ask your participating FHA lender about applying for an FHA 203(k) rehab loan which is also available as a refinance loan. FHA 203(k) mortgages allow you to buy and rehab, or refinance and rehab, a home you want to use or are currently using as your primary residence.

These loans have no FHA-required FICO score guideline differences than for other loans-that means the same basic financial qualifying criteria will apply for these loans as for new purchase loans for existing construction.

FHA Condo Loans

FHA condo loans have some unique requirements, but you can definitely purchase a condo unit in an approved condominium project.

How can I tell if the condo/townhome I want to buy is eligible for FHA financing?

How much is the mortgage insurance?

A Federal Housing Administration-backed loan requires an upfront premium, or fee, of 1.75% of the loan amount. You can:

Include that premium in your FHA closing costs, if you have the cash.
Or you can roll it into your loan amount, which increases your monthly payments slightly because you're borrowing more.

In addition to the upfront premium, you’ll pay a monthly premium that is added to your mortgage payments. This fee varies from 0.45% to 1.05% of the loan amount, per year, depending on:

The loan amount.
The size of your FHA down payment.
The term (the number of years the loan is financed for).

Helping You Buy on Your Own Terms

You owe it to your self to explore our hassle-free mortgage options at low and affordable rates.

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