FHA Home Loans
An FHA purchase loan is a low down payment government
loan program offered by HUD - Housing and Urban Development.
The minimum down payment required is 3.50% of the sales
price. You can only purchase a 1 to 4 unit home you
intend to live in and take possession of within a 60
days from closing. FHA loans are also available for
If you are purchasing a rural home, check out our
zero down rural housing loans. These loans are designed
for moderate income families and have income limits.
Veterans and active duty military personnel should
consider using a
VA loan. No down payment is required on loan amounts
up to $417,000.
Refinance an existing FHA Loan
|Rate & Term Refinance
Home Equity Loans
- Assumable - Yes,
but the new borrower must qualify for the loan to
- Bankruptcy or Foreclosure
You must wait 2 years from the discharge date.
You must have made all your payments on time for
at least 12 months. Permission from the bankruptcy
trustee is also required.
You must wait 3 years from the date of the foreclosure.
After a bankruptcy be sure to check your credit
report for errors and correct inaccurate information.
This can make a big difference in your credit scores
and loan approval.
- Buy-downs - Allowed
on 30 year fixed rate purchase loans. Not allowed
on ARM loans.
- Cash Reserves - No
reserves required on 1 - 2 unit homes. Borrower(s)
must have three months' mortgage payments in reserve
after closing on 3 - 4 unit homes.
- Closing costs - The
borrower may pay all closing costs except the tax
service fee. The seller can pay up to 6% of the
sales price towards your closing costs.
- Collections - Effective
April 30th, 2012 - Credit reports with Collection
accounts will require further review unless the
credit risk class is "Approve/Eligible". If further
review is required the following will apply:
- When collections are present, the borrower
must provide a written explanation for all collections.
- FHA does not require collections to be paid
off as a condition of mortgage approval.
If collections are revealed, but not on the credit
report, the loan must be downgraded for further
- Credit Scores - The
minimum middle credit score for Streamline
Refinance loans is 700. For all other FHA loans
the minimum middle credit score allowed is 640. If your
scores are below 640 you will need credit repair
to see if your scores can be raised enough to qualify.
- Disputed Credit Accounts
- Effective April 30th, 2012 - Credit reports with
Disputed Credit accounts will require further review
unless the credit risk class is "Approve/Eligible"
and any of the following circumstances apply:
- The disputed account has a zero balance,
- The disputed account is marked as "paid
in full" or "resolved", or
- The disputed account is both less than $500
and more than 24 months old.
If there are multiple disputed tradelines, each
must meet the above requirements or the loan must
be downgraded for further review.
- Qualifying Ratios
- Two ratios are considered for qualifying. Your
total housing payment vs. your gross income and
your total monthly debt payments(including the house
payment) vs. your gross income. Qualifying ratios
are limited to 31/43% and 33/45% for EEMs (Energy
Efficiency Mortgages). Higher ratios are allowed
with acceptable compensating factors.
- Eligible Property Types
- 1-4 unit homes, townhouse, HUD approved Condos
- Energy Efficiency Improvements
- EEMs are available on FHA loans..
- Gifts and DPAs -
Acceptable gifts and down payment assistance programs
are allowed to be used for the required down payment.
- Judgments - FHA continues
to require court-ordered judgments to be paid off
before the mortgage loan is eligible for FHA insurance.*
* Exception: An exception to the payoff
of a court-ordered judgment may be made if the borrower
has an agreement with the creditor to make regular
and timely payments, and provides documentation
indicating that a minimum of three months payments
have been made according to the agreement. The monthly
payment must be included in the borrower’s debt-to-income
- Loan to value - up
to 96.5% for purchase loans and up to 97.75% for
- Loan Types - 15,
20, 25 & 30 year fixed rate loan. 3/1 & 5/1 FHA
ARM loans are available with 1/5 caps and 1.75 margin.
- Maximum Loan Amount
- Based on the county your property is located in.
Most counties are at the base maximum loan amount,
which is $271,050. The San Antonio area is $316,250, the Austin area is $331,200,
the Houston area is $326,600 and Dallas-Fort
Worth area is $310,500.
Look up Maximum FHA Loan Limits
- Mortgage Insurance
- FHA loans require both annual an MIP and an
- Annual MIP
- The annual mortgage insurance premium is
included in your monthly payment. See the
** MI is required for the term of the loan.
Loans with a LTV at closing of 90% or less
only require MI for 11 years.
|Terms > 15 years
||Term =< 15 years
- Up-Front MIP - The UFMIP for FHA loans is currently
1.75% for all FHA loan types, except Streamline
Refinance loans refinancing an FHA loan that was
endorse/insured on or before May 31st, 2009 *. The UFMIP can be financed
in your new loan amount, up to the maximum FHA loan
Refinance transactions being used to refinance
an FHA loan when the
existing loan was originally
endorsed/insured* by FHA on or before May 31,
FHA loan is endorsed/insured within three months
of the original loan closing)
- The annual MIP, regardless of the base loan
amount, will be 0.55%
The Upfront MIP (UFMIP) , regardless of the base
loan amount, will decrease to 0.01%
- Occupancy - You MUST
occupy the home you intend to buy within 60 days.
NO investment properties or second homes.
- Reserves - No
reserves required on 1 - 2 unit properties.
Three months reserves are required for 3 to 4
- Residency - 1-4 family
primary residences only. Second home and investment
properties only allowed on streamline refinance
loans, with restrictions.
- Self-Employed - P&L
and Balance Sheet required if more than a calendar
quarter has elapsed since date of most recent calendar
or fiscal-year end tax return was filed by the borrower
– with no exceptions.
Additionally, if income used to qualify exceeds
the two year average of tax returns, an audited
P&L or signed quarterly tax returns obtained from
IRS are required.
Annual earnings that are stable or increasing
are acceptable, while businesses that show a significant
decline in income over the analysis period are not
acceptable, even if the current income and debt
ratios meet FHA guidelines.
- Seller Concessions
- Closing costs cannot be financed in the new loan
amount. They can be paid by the seller. The seller
can pay up to 6% of the sales price towards your
30 day lock.
30 day lock.
Minimum 3.5% down payment req'd.
Refinance Loan Rates - Request
analysis and estimate.
FHA 3/1 ARM & 5/1 ARM loans available.
>700 = subtract 0.25% pt.,
640 - 660 = add 0.25 pt.
All Loans - 640 Minimum.
|Additional adjustments & restrictions
may apply <> Contact us for an
analysis and estimate
It's real easy to get a pre-qualification analysis.
The results and an estimate will be emailed to you.
click here to get started.
Rates are subject to change without notice until
Rates on this Page Last Updated:
11/24/15 10:00 AM
- This is a short form that only
takes a few minutes to complete.
- It will give us the info we need to
pre-qualify you according to your income,
debts and funds available for down payment
and closing costs.
- The results will be emailed to you with
an estimate for your review.
- The Pre-Qualify form is primarily designed
for borrowers with good credit since NO
credit report will be pulled with this prequalification.
Email or call us if you need additional