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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

*Restrictions apply


FHA Disclaimer: Cornerstone Mortgage is not acting on behalf of or at the direction of HUD/FHA or the Federal government.