What is an FHA Loan?

An FHA loan is a mortgage backed by the Federal Housing Administration, designed to help more people achieve the dream of homeownership. With lower down payment requirements, flexible credit standards, and competitive interest rates, FHA loans are a great option for first-time homebuyers and those looking to make homeownership a reality.

Why Choose an FHA Loan?

Here are just a few reasons why FHA loans are so popular:

• Low Down Payment: You can get started with as little as 3.5% down, making it easier to save for your dream home.

• Flexible Credit Requirements: Even if your credit score isn’t perfect, you could still qualify. FHA loans are designed to be accessible to a wide range of borrowers.

• Competitive Interest Rates: Enjoy lower monthly payments with affordable interest rates compared to conventional loans.

• Support for First-Time Homebuyers: FHA loans are tailor-made for first-time buyers, but they’re also great for anyone looking for a more flexible mortgage option.

• Gift Funds Allowed: Don’t have all the cash for the down payment? FHA loans allow you to use gift funds from family or friends to cover it.

Who is an FHA Loan Best For?

FHA loans are a great fit for:

• First-Time Homebuyers: If you’re buying your first home and need a little extra help, this is the perfect option for you.

• Buyers with Limited Savings: With a low down payment requirement, FHA loans are ideal if you’re working with a tight budget.

• Individuals with Lower Credit Scores: If your credit score is 580 or higher, you could qualify for an FHA loan with minimal down payment. Even if your score is between 500–579, you may still qualify with a 10% down payment.

• Anyone Looking for Affordable Financing: FHA loans make homeownership attainable for a wide variety of borrowers.

FHA Loan Guidelines and Requirements

Here’s a quick overview of what you need to know about FHA loans:

• Minimum Credit Score: 580+ for a 3.5% down payment; 500–579 for a 10% down payment.

• Down Payment: As low as 3.5%.

• Debt-to-Income Ratio (DTI): Generally, your monthly debt payments should be no more than 43% of your income.

• Property Requirements: The home must meet FHA’s minimum property standards to ensure it’s safe and livable.

• Mortgage Insurance: FHA loans require an upfront mortgage insurance premium (MIP) and annual MIP, which is included in your monthly payment.

• Loan Limits: FHA loans have maximum loan amounts, which vary by location.

Why Work with Peoples Choice Mortgage?

At Peoples Choice Mortgage, we treat our clients like family. From your first inquiry to closing day, we’ll guide you every step of the way. Our team of experienced loan officers will work with you to find the best FHA loan program that fits your needs and budget.

Ready to take the first step?

FAQs About FHA Loans

Q: Can I use an FHA loan to buy a fixer-upper?
A: Yes! FHA offers a 203(k) Renovation Loan, which allows you to finance both the purchase price and renovation costs in one loan.

Q: Do I have to be a first-time homebuyer to qualify for an FHA loan?
A: Not at all! FHA loans are available to both first-time and repeat homebuyers.

Q: Can I use gift funds for my down payment?
A: Absolutely! FHA loans allow you to use gift funds from family or friends to cover your down payment.

Q: How do I know if I qualify for an FHA loan?
A: The best way to find out is to speak with one of our loan officers. We’ll review your financial situation and help you determine if an FHA loan is right for you.

Q: How long does it take to close on an FHA loan?
A: At Peoples Choice Mortgage, we strive to close loans quickly. Clean deals can close in as little as 15 days, but more complex cases may take longer.