FHA Mortgage Loans, provided by the Federal Housing Administration, are insurance-backed mortgage loans. They insure lenders against loss of principal in case the borrower fails to meet the conditions of the mortgage. Therefore, they allow lower income borrowers to buy a home by providing the following benefits:
First Time Home Buyers:
FHA Mortgage Loans allow first time home buyers to put down as little as 3.5% and receive up to 6% towards closing costs and other fees.
Fixer-Uppers and Remodeling Projects:
FHA Mortgage Loans allow you to buy a home, fix it up, and include all the costs in one loan. If you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs. You can even include the cost of energy improvements into in the loan.
What can FHA loan be used to buy?: Primary residence purchases only.
Maximum Loan Amount: $346,250 (For single family home in Maricopa County, Arizona).
Down Payment Requirement: 3.5% of the purchase price.
Available Loan Terms: 5yr or 7yr ARM, 15 and 30 year fixed mortgage.
Is Mortgage Insurance Required? Yes.
Are there property Eligibility Requirements: Yes – see FHA Property Requirements.
Income Eligibility Requirements: No minimum or maximum income limits.
Maximum Debt to Income Ratio: 56.99%
Minimum Required Credit Score: 620
Are Seller Paid Closing Costs allowed: Yes – up to a maximum of 6%.
Are gift funds allowed? Yes – borrowers can receive gifts for down payment and closing costs.