FHA Home Loans

If you’re new to the real estate market or a first-time homebuyer, it’s easy to get confused about the various types of mortgages available. At Financial Concepts Mortgage in Edmond, OK, we offer all kinds of loans, including FHA home loans that make it easier for buyers who lack the proper down payment or credit score for a conventional loan. If financial hardship has you feeling like owning your own home is out of reach, you may be surprised to learn that there is a realistic path to ownership with a government-backed FHA loan from Financial Concepts Mortgage. Contact us to learn more or start your application to get pre-qualified today.

What Is an FHA Home Loan?

FHA home loans are those backed by the federal government to protect lenders who provide these loans if the borrower defaults. The Federal Housing Administration (FHA) is a division of the U.S. Department of Housing and Urban Development (HUD) that was created by Congress in the 1930s when the housing industry was experiencing a significant decline. Buyers were having trouble meeting the difficult terms required for mortgages, so most of the country was renting. As a result, houses weren’t being built, construction workers lost their jobs, and the economy suffered. Over the years, the FHA has helped stabilize the real estate market and provide affordable, low-interest loans to those who previously weren’t eligible for mortgage lending.

Financial Concepts Mortgage is licensed to provide FHA mortgages in Oklahoma, Kansas, Texas, Arkansas, and Alabama. As of 2021, the limit for how much can be borrowed for a single-family home is $365,362 in low-cost areas and $822,375 in high-cost areas. Keep in mind, your loan limit may differ based on the county you reside in and the type of home you purchase. Click the corresponding button below for a full breakdown of loan limits in your state.

What Is Involved in an FHA Home Loan?

Since most individuals who seek an FHA loan don’t have the proper credit or enough down payment savings as those who qualify for conventional loans, there are some differences applicants should be aware of. FHA loans are geared toward those seeking low- to moderate-priced homes and are not designed to help buyers seeking higher-priced houses or those with significant down payment savings available. FHA loans come with a Mortgage Insurance Premium (MIP), which is an insurance charge based on a percentage of the purchase price. The insurance can be used to pay the lender if there is a default on a payment.

FHA Eligibility Requirements

While an FHA loan is one of the easier loans to acquire, there are still some strict eligibility requirements that borrowers must meet to qualify. There are mandatory requirements for both the borrower and the property to be purchased, including:

• A minimum credit score of 580 for 3.5% down payment eligibility
• A credit score of 500-579 for 10% down payment eligibility
• Debt-to-income ratio must be 43% or less
• A debt-to-income ratio of 50% may be acceptable with a higher credit score
• Steady employment and income are required
• Property must meet the safety, security, and structural integrity requirements set by the FHA

Benefits of Acquiring an FHA Loan

Homeownership is a dream for all. FHA loans provide an opportunity for many Americans, whether they’re first-time homebuyers, homeowners looking to refinance, or those looking to purchase a manufactured home. Each of these groups is eligible for an FHA loan. In addition to being backed by the government to guarantee the loan, other benefits of FHA loans include:

• Lower down payment requirement
• Streamlined financing process
• Mortgage terms for 25-30 years
• Closing costs of up to 6% of the purchase price can be included in the loan
• Down payment gifts are accepted
• FHA loans are assumable

Types of FHA Loans

There are different types of FHA loans available from Financial Concepts Mortgage that cover everything from first-time home purchases to manufactured home purchases and homes constructed on purchased land. Our team can help with:

• Basic Home Mortgage Loan 203(b): Fixed or adjustable rates available
• 203(k) Rehab Mortgage: Finances purchase and renovation with one loan
• Construction to Permanent (COP) Loan: Finances the construction of a home as well as the land on which it will be built
• Title I Property Improvement Loan: Used to purchase a manufactured home or repair an existing home
• Energy-Efficient Mortgage (EEM): Finances energy-efficient upgrades during a home purchase or refinance