An FHA mortgage loan is insured by the Federal Housing Administration (FHA), operating under the U.S. Department of Housing and Urban Development. The FHA loan program can be used for the purpose of purchasing, refinancing, or renovating a property. Unlike other loan programs, gift funds can contribute to the down payment. Benchmark Mortgage Companies, an affiliate of Tidewater Home Funding, LLC., has approved delegated underwriting authority with FHA.
Loan Program Benefits
FHA-insured mortgages can help more people enter the homebuying market. Some benefits an FHA mortgage loan program offers includes:
- Easier to qualify for than other mortgage loan programs because an FHA loan is backed by the Federal Government
- FHA-insured mortgages require a lower down payment and gifts can contribute to the down payment funds
- Offering more flexibility, those with lower credit may have an easier time qualifying
- FHA loan programs typically have better interest rates than most traditional mortgage loans
- Designed to keep homeowners in their homes, the FHA offers various programs to help homeowners during difficult times to keep your home from falling into foreclosure
Loan Program Qualifications
Qualifying for a home mortgage loan can be difficult especially without a sizable down payment and moderate credit report. There are fewer restrictions when qualifying for an FHA loan compared to other loan porgrams. Qualifications for an FHA loan include:
- Property must be your primary residence
- Employement status of at least 2 years
- Steady, or increasing, income over a 2-year period
- History of on-time payments with no more than 2 missed payments on your credit
- Monthly mortgage payment should be roughly 30% of your gross income
- Minimum down payment paid of 3%
- Agree to 2.250% in closing costs
- Only certain properties are eligible including single-family homes, condominiums, double-wide manufactured homes, modular homes, and 2-4 unit properties
- If you've filed bankruptcy, you must wait at least 2 years and have good credit since filing
- Those with foreclosures must wait at least 3 years since the most recent foreclosure
This is not a commitment to lend. All loans subject to program guidelines including credit and property approval. If refinancing an existing loan, the total finance charges may be higher over the life of the loan. These materials are not from HUD, VA, or FHA and were not approved by HUD or any other government agency.
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