FHA Loans are mortgages insured by the Federal Housing Authority. Due to this government backing, FHA loans typically have slightly lower interest rates, compared to Conventional loans. Here are some of the standard guidelines:
Minimum FICO of 500.
Minimum down payment of 3.5% (10% for FICO scores 500-579).
Maximum Loan amount of $484,350—for a single family (some counties have lower loan limits. Multi-family homes, up to 4 units, have higher loan limits).
Monthly Mortgage Insurance required on all loans, often for the life of the loan. A one-time Upfront Mortgage Insurance Premium of 1.75% on all loans.
FHA has Minimum Property Standards, our loan officers are trained to spot potential issues so they’re known before the appraisal, but homes in need of major repair may not pass. FHA Loans are available with both Fixed and Adjustable Interest Rates. Terms are available in 15 and 30-year lengths. FHA 203k Standard & 203k Limited Construction Loans.
FHA 203K Renovation Loan
Down Payment Minimum: 3.5%.
Mortgage Insurance Required: Always.
Purchase or Refinance: Both.
Minimum FICO: 580.
The FHA 203k is the most commonly used renovation/construction loan. Before the Conventional Fannie Mae HomeStyle loan, it was virtually the only option on the market. On properties that need minor or major repairs, home buyers or owners can use the 201k Renovation loan to make desired and required repairs. Luxury updates are not allowed and certain repairs MUST be completed. FHA offers a limited version of the 203k which caps the renovation cost to $35,000—but also has fewer requirements.
This is a great option for those who may not qualify for a conventional loan, are looking to perform the work on an owner-occupied multi-family home with a small down payment, and/or have FICO scores that are below 680.
