An FHA loan is a US Federal Housing Administration mortgage insurance backed mortgage loan which is provided by First Community Mortgage. FHA insured loans are a type of federal loan that have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. Read below to see the benefits and why they are a great option for first time homebuyers!
What are the Benefits?
Flexible Credit Qualification Standards
FHA loans have more flexible credit qualification standards than Conventional loans.
Lower Credit Score Requirement
The minimum credit score requirement is for an FHA Loan is typically lower than a conventional loan program.
Down Payment Options
Your down payment may also come in the form of a gift from family, certain government agencies, and charitable organizations.
What Else Should I Know?
Mortgage Insurance Premium (UFMIP)
To obtain mortgage insurance from the Federal Housing Administration, an upfront mortgage insurance premium (UFMIP) equal to 1.75 percent of the base loan amount at closing is required. This is normally financed into the total loan amount by the lender and paid to FHA on the borrower’s behalf.
Mortgage Insurance Premium (MIP)
There is a monthly mortgage insurance premium (MIP) which varies based on the loan term and loan-to-value ratio.
Terms and Conditions
Terms and conditions apply. Loan approval and terms are dependent upon borrower’s credit, documented ability to repay, acceptability of collateral property, and FCM underwriting criteria. First Community Mortgage, Inc. is not affiliated with or acting on behalf of or at the direction of FHA or the Federal Government.