• Federal Housing Administration

  • There are many reasons an individual or family may struggle to quality for a home loan. Many people have poor credit scores from  unfortunate situations that don’t adequately reflect their current financial situations or habits. If you find yourself in the tight spot between wanting to buy a home and not having the financial history to back you up, thankfully there’s a federal program in place for which you very likely qualify.  

    Federal Housing Administration Loans–more commonly referred to as FHA Loans–are a tool many first time home buyers utilize to secure their dream home. These loans are easy to apply for and are extremely attractive to many families with complicated finances because the qualifications are relatively low. That means that even without rock star credit history, you can still qualify for a mortgage loan. If borrowers simply have a steady income, and are not currently experiencing a foreclosure or going through bankruptcy, there’s a high chance of qualification for an FHA Loan. At Fairway Mortgage Company, we can assess your situation and help you determine if you qualify for an FHA Loan.  

    How an FHA Loan Can Help You

    To put in plainly, FHA Loans get you into the home you want more quickly and with less hassle. While the qualifications are not rigid or strenuous, it’s important to understand them fully to grasp how useful an FHA Loan program can be in your home-buying journey. Here are some factors to digest that make an FHA Loan worthwhile. You can also check out the FHA Loan Requirements.

    If you are looking for a FHA Loan in Sacramento, RocklinRoseville, Folsom or El Dorado County give us a call! 

    Loan Payments

    FHA Loans typically require a 3.5% down payment from the borrower. With such a low down payment minimum, the FHA loan product is really a no brainer
     

    Lender Opinion Influence

    As with loans products, the FHA product has guideline requirements to help ensure that borrowers don’t fall in over their heads. The front-end ratio (mortgage payment plus any other required housing expenses) and the back-end ratio (mortgage payment plus all other monthly debts) are required to be under a certain percentage of gross income in order to meet FHA’s qualifying requirements. Lenders work to tell borrower’s “story” through the documentation that they require while meeting all FHA guidelines. The process centers around each specific situation and no two borrowers are treated the same.

    Low Credit Score

    As mentioned previously, borrowers do not need excellent credit to apply or qualify for an FHA Loan. The standard expectation is a score of 600, but–as these loans do differ based on individual situations as well as county standards–it is possible to qualify with a score as low as 500. In scenarios where the credit score is lower than 600 a down payment greater than the typical 3.5% may be required in order for a borrower to qualify for an FHA loan. Where no other mortgage may be possible due to a low credit score, an FHA loan could still be in the cards.

    With qualification standards that work for the borrower, FHA loans are an excellent option for families and individuals who need a little extra support while they get back on their feet. At Fairway Independent Mortgage Corporation, we can assess whether you qualify for an FHA Loan and guide you through the steps for applying for one. Contact us today to get the assistance you need to afford the perfect home. We’ll help you take a step in the right direction

    FHA Loans Sacramento

    FHA loans are some of the most flexible and easiest guidelines to qualify for. So it's without
    surprise we recommend these loans for many of our clients.

    • Typical Minimum Down Payment: 3.50% which can come as a “gift” from approved
      sources
    • Up Front MI of: 1.75%, can be added to Loan 
    • Monthly MI of: .85%
    • Maximum Loan Amount SFR: Loan amounts are set by counties. In many northern California counties, the limit is $517,500. Loan amounts above $453,100 have additional costs and or rate increases. In the San Francisco Bay Area, FHA loan limits are as high as $679,650. Maximum Seller Concession: 6%
    • Minimum FHA FICO requirement is 600 but can go as low as 500 subject to additional approval requirements.
    • Refinancing is allowed, at high loan to value ratios for most no cash out refinances
    • Both Fixed-Rate and Adjustable-Rate loans permitted
    • Roof & Pest inspections not mandatory unless noted by appraiser or called for in contract
    • No Income Limits
    • Do not have to be a first-time buyer
    • Must be owner occupied
    • No requirement for reserves when purchasing a single family dwelling in most loan scenarios.
    • Non-Occupying co-borrowers allowed
    • Can utilize other state, county and city programs, and Energy Efficient Mortgage options
    • FHA requires 90 days from date of trustee sale before the purchase contract can be written unless the contract is for an REO that is from a federally chartered bank
    • FHA Loans are Assumable