FHA mortgage loans are issued by federally qualified lenders certified by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.
FHA loans are an attractive option, especially for first-time homeowners because they are generally easier to qualify for than a conventional loan, they have lower down payment requirements and FHA loans allow the down payment to be a gift.
Here are some of the Unique Features of an FHA Mortgage
- 96.50% LTV for a Home Purchase
- 97.75% LTV Home Refinance
- Loan limits set by county (Common 1 unit Limits below)
- Boulder County $456,550
- Larimer County $300,150
- Weld County $322,000
- Adams, Jefferson, Broomfield &Denver Counties $424,350
- For Additional County and 2+Unit loan limits go to http://bit.ly/FHALoanLimits
- Allows for higher Debt-to-Income Ratios
- Allows for 100% gift for down payment (With a 620+ FICO)
- Mortgages available down to a 600 mid FICO score (<640 FICO may have some additional restrictions.)
- No reserve requirements (May be a compensating factor)
- No Appraisal program available for FHA to FHA Refinances
- Non-Occupying Co-Borrowers allowed on 1 unit properties with a 640+ FICO score
- Combining a 1st & 2nd mortgage/HELOC NOT CONSIDERED CASH-OUT if no money has been drawn off the 2nd mortgage/HELOC in last 12 months.
- 36 Month Seasoning Required for past Foreclosure or short sale (Start from foreclosure sale date)
- 24 Month Seasoning Required for a past Bankruptcy. (Start from discharge date)
Reasons to consider an FHA Mortgage
- Borrower has less than a 700 FICO score
- Borrower has a small down payment or down payment is a gift
- Borrower has higher debt ratios
- Borrower needs a non-occupying co-borrower to qualify
Note: All government insured loans are for Owner Occupied 1-4 unit properties. 2nd home and investment properties may be eligible for one of the above loans if they currently have a government insured loan and the home was originally owner occupied.