FHA Loans

FHA Loans: Unique Benefits and Easy Approval

FHA loans are a great home financing solution for those looking for a loan with easy qualifying requirements and a minimal down payment requirement. These loans are backed through the federal government, which gives private lenders more confidence to lend to a broader spectrum of clients. Caleb Parmenter – Big Valley Mortgage works with borrowers in Fresno, Clovis, Madera, Visalia, and surrounding California to connect them with FHA mortgages through top national lenders with great rates. Read on to learn more about the basics of FHA loans and contact Caleb Parmenter – Big Valley Mortgage for a hassle-free quote.

A Path to Financing for More People

Nonconventional mortgages, like FHA loans, are insured through a division of the federal government. In the case of FHA loans, that division is the Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (USDA). Other types of nonconventional mortgages include VA loans and USDA rural loans, and each has unique benefits for different groups of borrowers.

The FHA was first created in 1934 during the Great Depression to help support homebuyers by insuring their home loans with private lenders. Though times and approval requirements have changed, the mission of FHA loans remains the same: to help pave a path to homeownership for qualified candidates.

Approval Requirements and Benefits

There are a few benefits and basic requirements that make FHA loans unique.

First, regarding down payment, clients with a 500-579 credit score can secure as low as 3.5% down payment, and clients with 580+ score can secure as low as 10% down payment. One special benefit is that FHA loan down payments can be obtained as gifts. Gifts can come from friends, family members, charitable organizations, or other sources.

The FHA does have maximums in place for debt-to-income ratios (DTIs). Maximum DTI for housing costs cannot exceed 31%, and maximum DTI for housing costs and other monthly expenses is 43%. Caleb Parmenter can help you determine if your financial obligations meet these requirements.

Mortgage insurance (MIP) is required with any FHA loan until the borrower has paid off 20% of the loan. The more you can put down, the shorter time and less money you’ll pay towards MIP over the life of your loan.

A Mortgage Pro Connected with Powerful National Lenders

Ultimately, private lenders determine who they will and won’t approve for these and any other type of loan. Only FHA-approved lenders like those we partner with at Caleb Parmenter – Big Valley Mortgage can provide this specialized home mortgage solution. If you are interested in purchasing a home in Fresno, Clovis, Madera, or Visalia, Caleb is here to help you compare home financing options and choose the best loan for long-term success. Contact us to talk about your goals as a homeowner and to get a free quote.