Using an FHA loan to Purchase a Home
The FHA loan program was created to help increase home ownership. The FHA program makes buying a home easier and less expensive than many other types of real estate mortgage programs. The FHA loan is a standard 30 year fixed rate mortgage made by a lender that is guaranteed by the Department of Housing and Urban Development (HUD). In exchange for HUD's guaranteeing the lender against loss, HUD charges the borrower a 1.75% Up-Front Mortgage Insurance Premium which is financed into the loan and an annual mortgage insurance premium of 1.35%.
- Down Payment and Closing Costs:
- The minimum down payment is 3.5% of Sales Price.
- Gift funds can be used for down payment and closing costs allowed.
- Seller can credit up to 6% of sales price towards buyers closing costs.
- Credit Qualifying Guidelines:
- No minimum FICO score or credit score requirements.*
- FHA will allow a home purchase two years after a Bankruptcy.
- FHA will allow a home purchase three years after a Foreclosure.
- Less restrictive underwriting Guidelines than conventional loans:
- Higher debt-to-income ratio's than other home loan programs.
- Less than two years on the job is allowed.
- Self Employment is acceptable.
- Eligible for most properties
FHA Disclaimer: Cornerstone Mortgage is not acting on behalf of or at the direction of HUD/FHA or the Federal government.