There is a lot of attention in the media right now regarding state of the American Mortgage Markets. There have been many lenders that have gone out of business and many that have lost a lot of money from mortgage gone bad. All of this attention in the media has erroneously led consumers to believe you need a 20% down payment and perfect credit to buy a house. This perception is not true, as there are excellent loans available today that allow you to put 3% down and obtain low rate 30 year fixed loans.
FHA (Federal Home Association) is a Government organization that insures loans against loss. FHA has been around since 1934 and FHA loans have begun to gain popularity again with all the changes in the mortgage market.FHA has some incredible features that allow home buyers to purchase homes with a very low down payment and obtain a low 30 year fixed rate mortgage. Additionally, FHA is not credit score driven, so if your credit is not perfect you can still get a FHA loan. Here is a summary of the wonderful features of FHA loans:
-FHA lends up to 97%, so you need only 3% down to buy
-the 3% can be a gift from a family member
-there is a program that allows the seller of the house you plan to
Purchase to credit you for the 3% down
-FHA allows the seller to credit you for 100% of your closing costs
-if you can’t qualify on your own, FHA allows co-borrowers that do not have
to live in the property
-FHA is for primary residences only (no investment properties)
-FHA is not credit score driven
So that is an overview of the benefits of FHA. As you can see there
Are ways to use an FHA loan and put zero down in the purchase of a house? You can also use FHA with the various down payment assistance programs that will be addressed in further articles.
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