The Federal Housing Administration, or FHA, was created in 1934 as part of the National Housing Act. This government agency has made sure that loans made by banks and other private lenders for home building and home buying are insured. The objective of this organization is to improve housing conditions and standards, provide a functioning home financing system, and stabilize the mortgage market. FHA loans are a result of this effort.
The FHA does not set a required minimum credit score in order to be applicable for an FHA loan but instead, each borrower’s credit in considered together. These loans have some leeway, even if you have filed for bankruptcy before, but lenders can implement their own requirements on top of those already in place. For example, some may require a minimum credit score.
Since 2005, the FHA loan Program has seen a 900% growth. Some key changes have been made, making it more popular than it has ever been. FHA maximum loan limits have been raised across the board and housing prices are in a slump. This means that a higher percentage of homes qualify for FHA financing than ever before!
These FHA Loan requirement changes mean millions more can now qualify for an FHA Loan, one of the best choices for prospective home buyers in today’s mark
Important Information about FHA Loans:
- 3.5 percent down payment of the purchase price
- Low monthly mortgage insurance
- Low, government-capped closing costs
- Relaxed credit score requirements
- Quicker qualify post-bankruptcy
FHA Loans Allow For Blemished Credit History:
In today’s tight lending environment, an FHA is often the best choice for borrowers with past credit issues. Most borrowers find it is a lot easier to apply for an FHA loan. Borrowers can have lower FICO scores, some blemishes on credit and don’t need to put as much money down.
- Lower FICO scores are accepted
- FHA loans require 2 years waiting period between bankruptcy, 1/2 the time as a regular loan
- FHA loans require 3 year wait period after foreclosure, as opposed to the 4 for a regular loan
Hello, my name is Brian Quigley and I have been in the Denver mortgage industry since 2003. I have been fortunate enough to choose this very rewarding mortgage broker career and help thousands of borrowers over the years. Customer satisfaction is important to me most, and getting my clients to the closing table smoothly. Read More…