FHA Loans

January 17, 2020


FHA loans are government loans that encourage home ownership and provide affordable housing opportunities with low down payment and flexible credit requirements.


FHA-The Federal Housing Administration was created out of the National Housing Act established in 1934 and was made to increase home construction, reduce unemployment and insure government loan programs. Since 1934, FHA has insured millions of home mortgages with a large market share. Most people think that FHA lends money directly to borrowers, in fact it actually just ensures a certain type of loan that is financed by traditional banks and mortgage brokers/lenders. 


Standard FHA- Section 203(b)

  • 96.5% financing with a 3.5% minimum down payment
  • 1-4-unit Family homes
  • Offered 15- and 30-year fixed rate fully amortizing terms, as well as a 3/1 ARM, and 5/1 ARMs
  • Expanded credit requirements down to a 580 score in some cases
  • Upfront mortgage and monthly mortgage insurance required
  • Down payment may be gifted from specific sources


FHA Back to Work-We are happy to announce the FHA Back to Work Program. The two to four-year waiting period may be waived for bankruptcies, foreclosures, deeds-in-lieu, short-sales, delinquencies, collections and judgments.


  • Only Purchase 30-year fixed rate transactions are allowed
  • Minimum FICO 620
  • Effective for case numbers assigned on or after August 15, 2013 through September 30, 2016
  • Must provide documentation to support the Economic Event
  • Verification of household incomes prior to the event
  • Verification of household incomes after the event
  • Income must have been 20% lower for at least six months, which must be documented
  • Only borrower’s income may be used to qualify, not the household income


HUD-approved counseling must address the economic event, the likelihood of a recurrence of the event and the actions taken to overcome the event. A list of agencies can be obtained online at http://www.hud.gov/ or by calling 1 (800) 569-4287

Counseling must be completed at least 30 days prior to the app date and no more than six months prior to application


FHA Rehab loan- Section 203(k)

  • Primary program for property rehabilitation
  • Only 1 mortgage loan is used for both the acquisition and the renovation
  • Encourages community and neighborhood revitalization
  • Required improvements include cost effective energy conservation standards and smoke detectors
  • 1-4-unit properties including condominiums are eligible; check with your lender for manufactured housing eligibility


The FHA programs we offer go way beyond the capacity of the all the previously listed programs. We offer a Streamline Refinance as well as a Streamline 203(k) for limited repairs. Recently legislation has helped FHA offer special programs with incentives to lenders for modifying and refinancing existing mortgages like with the “Making Home Affordable Program.” Click this link to see the eligibility requirement for HARP 2.0.


When you're looking for a loan program to fit your specific needs, take a close look at FHA. Their programs have become more attractive to both lenders and consumers over the past few years. With favorable loan terms, higher county loan limits, 30-year fixed repayment terms and flexible down payment options, FHA will continue to encourage homeownership, provide liquidity and help to stabilize the current mortgage market.

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