What is a FHA Loan?
A FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA). They are popular especially among first time home buyers because they allow a down payment of 3.5% for credit scores of 580+. The borrower’s credit score can be between 500 – 579 if a 10% down payment is made. It’s important to remember though, that the lower the credit score, the higher the interest rate borrowers will receive. Borrowers must pay mortgage insurance premiums, which protects the lender if a borrower defaults. FHA loans are available only on a primary residence and you do not need to be a First Time Home Buyer. FHA does have a "loan amount cap" depending on the county in which the property is located.
https://entp.hud.gov/idapp/html/hicost1
The down payment can come from a gift from a relative. The closing costs can come from a gift, the seller or through a higher interest rate giving a credit back to the borrower.
Wilson Mortgage Services, Inc. is licensed by the PA Department of Banking and the FL Office of Financial Regulation
