In the aftermath of World War I and the Great Depression, the housing industry was in shambles. Construction of new homes stalled and foreclosures on existing mortgages were rampant. In an effort to offer the industry relief, the US government intervened. It created the Federal Housing Authority (FHA) and, in a nutshell, revolutionized the mortgage market.
Homeownership is an option for so many today thanks to the FHA’s ability to offer a variety of loans for all types of home buyers. Got less than stellar credit? FHA has a minimum score requirement of 580 (though most lenders require a score of 620 to 640). Don’t have 20% to put down? Some homebuyers are able to apply with as little as 3.5%. Looking for a fixer-upper? FHA has an option for that, as well as options for manufactured homes, condos, and multi-family units.
With its range of low-cost products and inclusive property and credit requirements, it’s no wonder that FHA loans are such fan favorites. Let’s look at three specific FHA loan products available to you if you’re working with United Atlantic Mortgage.
FHA 203(k) Improvement Loan
A 203(k) loan allows Borrowers to bundle the purchase of a home and certain repairs into one loan—a great option if you don’t have a lot of cash on hand after closing or if your dream home is a fixer-upper. The home must meet certain conditions, and eligible repairs must improve the property’s appeal and/or address health and safety concerns or livability, but if it does, you can finance up to $35,000 or 110% of the after-renovation cost.
FHA Reverse Mortgage
Reverse mortgages allow seniors 62 and older to convert the equity in their homes to cash either as a lump sum or a fixed monthly payment to supplement their income. While Borrowers are not required to make monthly mortgage payments, the entire loan balance, up to a limit, becomes due upon death or departure from the home.
FHA Down Payment Assistance
The down payment assistance program, which is offered by one of United Atlantic Mortgage’s partner lenders, is a 100% non-repayable lender grant of 2% or 3.5% that can be used towards either closing costs or the down payment respectively. Eligibility requirements are slightly more stringent than the 203(b), and Borrowers must meet one of four additional criteria.
If you are in the market for a home, especially if you are a first-time homebuyer, you need to consider an FHA loan. Reach out to see if you qualify for one of these products.