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FHA Loan

  • FHA Loan, Old Point National Bank

FHA Loan Program

The Federal Housing Administration (FHA) is an agency within the Department of Housing and Urban Development. FHA loans are designed to help low- to moderate-income creditworthy families by offering a mortgage with lower down payment requirements and less restrictive qualifying criteria.

 

Important Benefits of FHA Loans:

  • Only a 3.5% down payment is required
  • Down payment can be a gift or a loan to the borrower from an eligible source, such as a family member or a state housing agency program
  • Sellers may pay 6% toward closing costs, prepaids, buy downs, abatements, etc.
  • Cash reserves are not required (except for 3 and 4 unit properties)
  • Flexible guidelines for qualifying ratios
  • More lenient on credit blemishes
  • Non-occupying co-borrowers are allowed

Property Eligibility:

  • At least one borrower must occupy the property as a primary residence
  • Second homes aren't permitted. Investment properties are only eligible for streamline refinances without an appraisal

Qualifying for an FHA Loan:

  • Debt-to-income ratios should be 31/43 unless an automated underwriting approval is received or if there are significant compensating factors.
  • Chapter 13 bankruptcies are acceptable with 1 year of timely payments and permission from the trustee
  • Chapter 7s are acceptable 2 years after discharge with no new credit problems

Other loan program restrictions may apply. Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend.

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