Skip to main content

FHA Loan

What is an FHA Loan?

An FHA Loan is a mortgage insured by the Federal Housing Administration. Overseen by the Administration of Housing and Urban Development. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan. FHA loans do not come directly from the FHA, they insure these loans. 

|

FHA Fun Facts

  • Sellers can contribute up to 6% in closing costs and prepaid expenses
  • Available for 1-4 unit properties
  • The FHA is not the lender, only the insurer to an FHA-approved lender.
  • Need some rehab (nonstructural) done before you move in? There is also an FHA 203k loan. Let us know if you want to learn more.
  • Maximum Loan amount in St. John’s, Duval, and Clay County: $330,050.
  • Occupancy type: Primary Only

__________

FHA Money Facts

Credit issues

  • Min. Credit Score: 580
  • Debt to Income Ratio: Typically 43%
  • Gift Funds: Allowed
  • Seller Concessions: Up to 6%
  • Any foreclosure action against you must be 3 years old or more
  • You must have 36 months of good credit after the foreclosure action against you
  • You must have 36 months of stable income
  • Any bankruptcy action taken by you must be 24 months or older
  • You must have a record of paying your bills 24 months after the bankruptcy proceeding

__________

Down Payment

  • min. 3.5% down payment (FICO credit score > 580)
  • min. 10% down payment (FICO credit score 500-579)
  • FICO credit scores < 500 are generally ineligible for FHA loans

Mortgage Insurance Premiums Explained (there are 2 of them) [source: www.portal.hud.gov]

  • First Premium: The Upfront Mortgage Insurance Premium (UFMIP) note: this is a one time premium that can be financed into your loan
    • 1.75% of Base Loan Amount (ex. $100,000 = $1750)
  • Second Premium: Annual Mortgage Insurance Premium (MIP)
    • .85% for down payments less than 5% [ex. $100,000 = $850]
    • .80% for down payments greater 5% [ex. $100,000 = $800]
    • Although this an annual premium, it’s paid monthly with your monthly mortgage payment
  • NOTE: THE MORTGAGE INSURANCE PREMIUM WILL REMAIN THROUGH THE LIFETIME OF THE LOAN

Let’s Connect

You’ve got questions and we can’t wait to answer them.

We use cookies and tracking technology in connection with your activities on our website. By viewing and using our website, you consent to our use of cookies and tracking technology in accordance with our Privacy Policy.