FHA stands for the Federal Housing Administration. The FHA was created in 1934 to help Americans realize the dream of homeownership. FHA was absorbed into HUD in the 1960′s and is now known as HUD-FHA.
There are a great many benefits to the Florida FHA loan program. Florida FHA loans are insured by the US government. They provide lenders with greater security than they get when they write traditional loans. HUD sets the basic FHA guidelines for lenders, however lenders are able to add on their own specific requirements. This is why not all lenders are able to offer Florida FHA loans to the same individuals. It is very important that you deal with a company well versed in FHA loans and that knows exactly how to take advantage of all of their great features.
We are still able to extend FHA financing to anyone with a credit score of 600 or higher. For those with lower credit scores, we have other loan options available for Florida residents if your score can’t be boosted over 600.
Here are some of the prime benefits of an FHA loan:
- Low down payment of 3.5%
- Co-signers (including non occupant co-signers) are allowed
- No income limitations at all
- 85% loan-to-value on cash out
- No need to pay off medical or small collection accounts (letters of explanation are used)
- Resident aliens are allowed
- No prepayment penalties EVER
- 6% seller contribution is allowed to pay for closing costs
- Ability to use non-traditional tradelines to qualify (phone bill, light bill, electric bill, cell phone bill, etc.)
- High debt to income ratios with compensating factors
- Compensating factors such as length of time on the job or funds in reserves help overlook negative factors
- No reserves required from buyer
- Gifts are allowed from immediate family members
Florida FHA loans are very popular right now as they allow first-time home buyers and people with less than perfect credit access to a low cost, secure mortgage.