FHA/VA

FHA Purchase Loans

The Federal Housing Administration (FHA) offers minimal down payment and flexible underwriting guidelines.

History
The FHA Purchase Loan has been used in the United States since 1934. It was created as part of Franklin Roosevelt’s New Deal to help stimulate housing recovery in the United States.

Features
The minimum down payment for an FHA Loan is 3.5%.  The 3.5% down payment is much less than the traditional 20% down payment required for conventional mortgages.  In addition to low down payments, the interest rates are at historic lows and you do not need perfect credit.  Below are the most common uses of an FHA loan:

  1. First Time Home Buyers- Many first time home buyers take advantage of FHA based on the low down payment and credit flexibility
  2. Non-Occupying Co-Borrowers- In plain English that means you ARE allowed to have co-borrowers that do not live in the property.  Most conventional loans do not allow this feature.
  3. Credit Flexibility- FHA understands that bad things happen to good people.  A chapter 7 bankruptcy, for example, is acceptable after 24 months using FHA financing.  Conventional loans require four years after discharge.
  4. Borrow More- In most cases, FHA financing will lend more than conventional financing with minimal down payment.
  5. Minimal down payment- 3.5% down payment.

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