FHA Loans
What are FHA Loans?
FHA loans are a popular choice for homebuyers because they’re insured by the Federal Housing Administration. This makes it easier for first-time buyers and those with less-than-perfect credit to qualify for a mortgage. At United 1 Mortgage Corporation, we specialize in FHA loans and can guide you through the process. Here’s how it works: The FHA doesn’t lend money directly; instead, they insure the loan, making you a less risky borrower. We’ll ensure you meet the FHA’s requirements and structure the loan accordingly. Explore our FHA loan center for more information and visit the official Housing and Urban Development website for additional resources.
FHA Loan Benefits
- Backed by the federal government, making lenders more likely to approve your loan.
- Requires only a 3.5% down payment, facilitating homeownership.
- Allows the down payment to come in the form of gifts, unlike other loan programs.
- Higher credit scores may result in a reduced interest rate.
- Government backing makes it easier for those with a poor credit history to qualify.
- Government backing typically results in better interest rates compared to traditional mortgages.
- FHA offers programs to assist homeowners in keeping their homes during tough times.
- Collaborates with homeowners to prevent foreclosure by resolving issues with lenders early on.
What are the FHA Loan Requirements?
Employment and Income Verification:
- Proven employment status of at least 2 years.
- Steady or increasing income over a 2 year period.
- Past two years completed tax returns.
- Past two years W-2's, 1099's and any other necessary tax forms.
- One month worth of newest pay stubs.
- Self-employed will need three years tax returns and YTD Profit & Loss Statement.
Credit History:
- History of on-time payment. No more than two missed payments on your credit.
- If you've filed for bankruptcy you must wait at least 2 years and have good credit since you filed.
- Those with foreclosures must wait at least 3 years since the most recent foreclosure.
Financial Obligations:
- Monthly mortgage payment should be roughly 30% of your gross income.
- You must pay a minimum of a 3.5% down-payment.
- Agree to 2.25% in closing costs.
- Past three months full bank statements for all accounts.
- Any recent statements from investment accounts (retirement, 401k, mutual funds, etc.).
Property Eligibility and Documentation:
- Only certain properties are eligible - single-family homes, condominiums, double-wide manufactured homes, modular homes and 2-4 unit properties.
- The property must be your primary residence.
- Driver's License or other official State identification. .
- Social Security Card.
- Any Divorce, Palimony, Alimony Documents.
- Green card or work-permit (if applicable)
Types of FHA loans
FAQ
A FHA insured mortgage is easy to qualify for, can be obtained with less than perfect credit, costs less and requires a smaller down-payment.
Yes, however be sure to check the pre-payment section of your contract before signing.
Yes, through the Energy Efficient Mortgages Program you can finance 100 percent of the cost of making your home more energy efficient. Contact us to see how.
Yes, the recently created FHA Secure is one of the ways that we can help you refinance your current home loan. Contact us now to see what we can do for you.
The recommended debt-to-income ratio for a FHA loan is 30%.
Absolutely, you can assume an existing FHA loan or allow a buyer to assume yours.
Yes, in fact FHA mortgages often require you to carry mortgage insurance for longer than most conventional loans.
