What is a FHA Loan?

FHA Loans in Houston

An FHA loan is a mortgage which is insured by the Federal Housing Administration (FHA). That means that FHA is assuming some of the financial risk associated with a borrowers loan. In the Houston Metro and surrounding counties, FHA limits each loan to <span class=”s1″>$420,680 for a single residence, $538,650 for a Duplex, $651,050 for a Triplex, and $809,150 for a Four Plex.

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FHA Loan Quick Facts 

Down payment as low as 3.5%, if your FICO Score is above 580.

 For purchase, the home must be consider in “livable condition” by FHA standards.

Choose your loan term from 10, 15, 20, 25, or 30 years.

Seller may give a buyer up to 6% of sales price to cover all or part of the Buyers closing costs.

Flexible Qualification.

Use for Purchase or Refinance.

 Primary homes only.

Unless you meet an exception, you are allowed only one FHA loan at the time.

Qualifying is Easy and Simple.

1 How’s My Credit

2 Loan Options

3 Approval Process

4 Steps to Closing

1 How’s My Credit

2 Loan Options

3 Approval Process

4 Steps to Closing

Houston FHA Loan Facts

Here are few reasons to think about applying for an FHA loan in Houston or Greater Houston:

FHA Loans are avoided because they have HIGH mortgage insurance that never leaves the Loan, regardless of your future Loan to Value!

Seller can pay from zero to 6% of a buyer’s closing costs;  and, part of this money can also be used to buy your interest rate down!

If you have Collections, FHA will ignore all Medical and Charged Off Collections.  We recommend you allow us to review file BEFORE settling any collections!

 If you are a First Time Home Buyer AND are having trouble saving money for your FHA Down Payment and/or Closing Costs, we may have some options to help.  Just ask us!

If your middle FICO Score is below 580, then you can still do an FHA Loan!  HOWEVER, FHA will require that you MUST put down at least a 10% Down Payment!

How much will you qualify for?

FHA may allow you to qualify for more.

On FHA Loans, your Middle FICO Score determines the MInimum Down Payment: 

  • If your credit score is between 500 and 579, you must pay 10% as Down Payment.
  • If your credit score is 580 and above, you may put down as little as 3.5% Down Payment.

Normally, your Debt-to-Income Ratio is allowed to go up to 43%, however, with FHA, if you have some positive compensating factors, you could be approved up to or beyond a 57% debt-to-income ratio.

You must provide documentation providing that you have been steadily employed over the past two years.  If there have been any breaks in employment within the last two years, then FHA will require a Letter of Explanation.

The property you are trying to finance must be your intended primary residence. An FHA loan cannot be used to purchase a second home, vacation home, or investment property.

You can not have any delinquent money owned to Federal Agency such as: Department of Education (student loans), HUD (past FHA loans), USDA and VA (mortgages), The Small Business Administration (SBA), and Department of Justice (DOJ). If you do, you will need to make payment arrangements and reapply to be accepted for an FHA home loan.

You do not need to be a first-time home buyer. However, you may be allowed only one FHA loan at the time UNLESS you are A) Relocating 100 or more miles from your current primary residence, or B) Have a significant increased in family size, or C) You are an allowed Non-Occupying Co-Borrowers who want to buy a home of your own, or D) You are moving out of jointly-owned Home, where the other co-borrower stays in the old property.

If you have been forclosed on, this does not disqualify you, but it must be 2 years or more behind you.

If you have declared bankruptcy, this likewise will not stand in your way, so long as it is two years or more in your past.

Other home loans include:

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