FHA Purchase Loan Basic Guidelines
Loan Amount - FHA has maximum loan limits. These loan limits are determined by the county and state that the new property is located. To check out the maximum loan limits in your area, visit theHUD website. Down Payment FHA requires a 3% down payment. This down payment can come from savings or it can be a gift from a family member. There are still some other programs available to help you with the down payment. Please contact us at 818-920-1600 for details on these programs. Closing Costs - The seller is allowed to pay up to 6% of the purchase price towards the borrowers closings costs. This can be very helpful if you do not have enough to cover both the down payment and closing costs. Non-Occupant Co-Borrowers-FHA will allow co-borrowers that do not live in the subject property to help the borrower qualify for a new loan. Compared to a conventional loan, this can be very helpful. Condominiums - FHA has a list of condominium projects that are approved for FHA loans. If the condominium that you are interested in is not on the list, this does not mean that you cannot get an FHA loan, but it does mean that it will have to be individually approved (spot approved) by the lender. To check a condominium project, see the FHA condominium website. Mortgage Insurance - Mortgage Insurance is insurance that protects the lender against losses in case a borrower defaults on their loan. FHA requires mortgage insurance on all of their loans. Mortgage insurance is charged at a rate of .5% - .55% monthly and there is an upfront MIP charge that is financed into the new loan of 1.25% - 2.25%. The amount that is charged is determined by the borrowers credit score and the loan-to-value (LTV).Contact us today at 818-920-1600.