The Federal Housing Administration (FHA) offers several programs to promote home ownership, one being the FHA loan program. FHA loans are mortgages obtained with the help of the Federal Housing Administration. FHA loans can make it easier for people to qualify for a mortgage, and include a small down-payment as low as 3%, but they are not for everyone or every home.
How Does an FHA Loan Work?
With an FHA loan the lender is guaranteed payment if the borrower defaults. This insurance against loss, covered by the Federal Housing Administration, means a lender is more likely to qualify you for a mortgage.
Can I Get an FHA Loan?
There are no upper income limits with FHA loans, so most anyone can qualify. However, you will be limited in how much of a home you can buy since the FHA limits loans to small amounts relative to home prices in your area. You can get more information on the loan limits in your area by visiting FHA’s Website.
Other qualifications for FHA loans are reasonable debt-to-income ratios and a decent credit score.
View my other post here for tips on how to improve your credit score.
Should I Try to Get an FHA Loan?
An FHA loan can make sense for some borrowers. FHA loans allow people to buy a home with a down payment as small as 3%. They also have some other nice features, such as easier gifting (getting money from family members or friends to help with down-payment and closing costs), no pre-payment penalties.
Here is a link to some FHA Approved Condos in the St. Petersburg area.
It is important to note that FHA loans and Fannie Mae loans are very different. FHA insures loans, while Fannie Mae purchases loans. Click here for more on Fannie Mae approved condos in St. Petersburg, Treasure Island and Clearwater.
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