An FHA (Federal Housing Administration) Loan is a type of loan that has been backed by the U.S Department of Housing and Urban Development to help first time home buyers in acquiring the finances they need to purchase their first houses or homes. This is not a federal or a government loan and every successful applicant will be required to repay it using their own funds.
Essentially, the FHA loans have been designed for first time home buyers but you can be a perfect candidate for this kind of loan if you meet the following-:
Though the loans are meant to help first time buyers in accessing funds to purchase their new homes, FHA guidelines makes it flexible for the applicants to use the loans for other related applications. With the loan, you are free to use the loan for the following uses-:
There is a limit that any individual can access when it comes to the FHA loans. These limits are dictated by a number of factors including the state of residence of the applicants. States will have different maximum amounts with an average of about $287,000. Some states will offer slightly higher than this while other will offer slightly lower than this amount.
Declaring bankrupt and poor credit scores are not usually big factors of concern when it comes to the FHA loans hence you can still be considered for the loans even when you have declared bankrupt in the past or you have not so pleasant credit score. If is however important to understand that each and every lender will have a set of their own terms and conditions which must be fulfilled by every client seeking to get the FHA loans from them. Please consult with your lender to ascertain that you will indeed be qualified for the loan even if you had declared bankrupt in the past.
The FHA loans have numerous benefits when compared to the conventional loans. To begin with, the credit qualifying criteria is not as strict as compared to the criteria needed for the conventional loans and with just a score of 580 you can be able to get access to the loans. The loans also require low down payment of as little as 3.5% of the total value of your home. Additionally, the FHA Loans has easy refinancing and you are able to get up to 97.75% of your home value.