As a future homeowner, you might know about the benefits of financing a home through an FHA mortgage, a Federal Housing Administration program.
For nearly 90 years, the federal government has stepped in to help families achieve homeownership by partnering with FHA lenders.
FHA-approved lenders do the actual lending, while the federal government plays the role of insurer. Because these loans are backed by the federal government, applicants will find an easier path toward reaching their ultimate goal of owning a home.
If you plan on purchasing a home this year, here are three advantages that await you on this journey.
Gift funds are allowed
Buying a home is a heavy financial lift. FHA programs are designed with that in mind.
It can be frustrating to be inches away from beginning the home-buying process, only to find yourself in a bind over the down payment requirement.
The FHA loan program permits the use of gift funds from a variety of sources. Whether they’re from a family member, friend, employer or even through a government grant, the gift is an acceptable funding source for securing a loan. This flexibility can truly make a difference.
Large down payment isn’t necessary
While some applicants will turn to gift funding for a little boost, the reality is that an FHA loan will not demand a large down payment.
The traditional benchmark for a down payment is about 20% of the purchase price. In today’s market, that is a big number.
It’s a different story with FHA. Under the FHA program, applicants will only need about 3.5% to move forward with the purchase. The low threshold is possible because loans are backed by the federal government. This financial backing also eases lender risk, boosting loan availability to more people.
FHA loan program is unique
If you recently tried to buy a home and didn’t succeed, you’re not alone.
FHA loans operate under consumer-friendly guidelines. So maybe this time, things will be different.
Was your credit score less than ideal before? Well, FHA requirements are not as stringent as other programs.
Please contact us today to learn about the other loan features and how they can help you achieve your goals of homeownership.