An FHA Loan is a type of government-insured mortgage loan that can be a great option for first-time homebuyers who have a lower credit score and can’t afford a large down payment. With our FHA Loan Program, you can put down as little as 3.5% of the purchase price, as long as your credit score is at least 580. This can make homeownership more accessible and affordable for many people.One of the benefits of an FHA Loan is that it is available on 1-4 unit properties, meaning that you can use this loan to purchase a single-family home, a duplex, a triplex, or a fourplex. This can be a great option for those looking to invest in rental properties or for those who want to live in one unit and rent out the others.
The FHA Loan is insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD). The FHA insures mortgages so that lenders are more willing to make more mortgages available to homebuyers. Because the FHA Loan is backed by the government, lenders take on less risk, which can make them more willing to offer loans to those with lower credit scores or smaller down payments.
However, because the FHA Loan is government-backed, it does require additional fees such as the Mortgage Insurance Premium (MIP) and the Up-Front Mortgage Insurance Premium (UPMIP). These fees are used to insure the lender against losses if the borrower defaults on the loan. The MIP is a monthly fee that is included in your mortgage payment, while the UPMIP is a one-time fee that can be rolled into your loan.
If you’re considering an FHA Loan, it’s important to work with an FHA-approved lender who can guide you through the process and help you understand the costs and benefits of this type of loan. Overall, an FHA Loan can be a great option for First-Time Homebuyers, those who need a lower down payment, or those who have a lower credit score.