An FHA loan is insured by the Federal Housing Administration (FHA), an agency of the U.S. government.
Because one of the FHA’s goals is to help more people become homeowners, FHA-insured loans have smaller down payments and other benefits:
- Down payments as low as 3.5%
- Lower closing costs
- Easier credit qualifying
- Allows for use of gifts for down payment and closing cost
- No prepayment penalties
- An FHA loan may be assumable
- Possible leniency during financial hard times
- Funding for home improvement (through FHA 203K program)
- Flexible credit, income and debt requirements
- Low down payment requirements
Allows for a seller concession of up to 6% of the sales price for buyer’s closing costs
- Higher allowable debt-to-income ratios
- Down payment assistant program available for qualified buyers
With an FHA loan, you will pay a monthly mortgage insurance premium (MIP) as part of your monthly mortgage payment, but the FHA MIP is often lower than the equivalent private mortgage insurance (PMI) premium that you might have to pay on a conventional loan with a low down payment.
There are many benefits to FHA loans. Call ZABE Mortgage or apply online to find out if you can benefit from an FHA loan.
We offer a number of loan programs that may be right for you. Count on your ZABE Mortgage loan professional to help you select the best one.
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