An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration (FHA), and is designed for low-to-moderate-income borrowers. FHA loans have more flexible lending requirements than those of conventional loans.
Types of FHA Loans
GuardHill offers mortgage financing for two types of FHA loans – Standard 203(b) FHA loans and renovation 203(k) FHA loans.
FHA Loan Requirements
Both the 203(b) and 203(k) FHA loans follow the same requirements listed below:
- Down payment can be as low as 3.5%
- The higher the credit score, the lower the down payment requirement
- A lower credit score will require a higher down payment
- Loan amount is based on conforming loan limits, which varies based on the housing type and the state and country in which the property is located.
- Mortgage insurance is required – it is required to be paid upfront (at closing) and as an annual premium
- Steady income history is required
- Total monthly debt should be no more than 43% of your monthly income; however given certain mitigating factors, the back-end ratio can be as high as 50%
- Mortgage payment (including PITI) needs to be less than 31% of your gross monthly income.
203(k) FHA Loan
A 203(k) FHA loan is a loan program that allows you to finance a home that requires renovations and repairs and wraps the remodeling or repair costs into your mortgage.
Click here to learn more about our 203(k) FHA loan for home renovations.
GuardHill provides FHA loans for 1-4 family dwellings and utilizes our in-house underwriting team to provide fast approvals to streamline the mortgage process.