FHA Mortgage Help Fill The Gap

USDA is a terrific home financing option assuming the buyer is purchasing a home in an approved USDA area, and their household income is below the USDA income limits.  But what about those buyers looking to purchase homes in more populated locations like Orlando, Jax, Tampa, West Palm Beach, Miami, etc?  Or maybe households that make too much money to be eligible for USDA financing?  What option do these buyers have?

Enter the FHA home loan program.  The FHA mortgage help fill the gap for those buyers that don’t meet the USDA eligibility requirements.  Like USDA Rural Loans, the FHA mortgage program is government-backed, safe secure 30-year fixed terms and offers easy credit qualifying guidelines.

The key difference with the FHA program is homebuyers are required to put down a 3.5% down payment, the program is not 100% financing like USDA.  However, with new down payment assistance options, eligible first -time buyers can be approved for their down payment, plus closing costs.

Also like the USDA mortgage, the FHA loan has one-time upfront mortgage insurance costs, along with monthly (PMI) costs. The one-time upfront FHA fee is currently 1.75% of the loan amount – which is normally rolled into (added) the buyer’s loan balance.  The monthly FHA fee varies based on the down payment amount, but for a max 96.5% financing, the costs are .55%  – or about $92.00 per month on a $200,000 loan.  Interested buyers can read here about recent FHA mortgage insurance changes here and the most commonly asked FHA Q&A

Of course, the primary benefit to the FHA loan option is there are NO special-approved areas like the USDA RD loan.  Home buyers using FHA home financing can purchase anywhere, there is no restriction. Single-family home, condo, townhome – just as long as the home is in good repair and meets all standard HUD requirements.  In addition, there are no household income limits with FHA. If a borrower makes a very high income, that’s ok!

Buyers that have questions about getting pre-approved for the FHA program can visit FHA Mortgage Source at www.fhamortgagesource.com or call ph: 800-743-7556, we are available to serve you 7 days a week.