FHA loans are an attractive option, especially for first time home buyers because it is a loan insured by the Federal Housing Administration (FHA) and allows for 3.5% down payment.
An FHA loan allows a lower credit score than a conventional mortgage, and the minimum down payment depends on your credit score. If you have a FICO score that’s 580 or higher, the minimum down payment is 3.5%.
Mortgage insurance must be paid on an FHA mortgage, either upfront at closing or rolled into the loan, plus monthly as part of your regular mortgage payments. FHA-approved banks and lenders issue FHA loans.
The FHA has a maximum loan amount that it will insure, known as the FHA lending limit. In 2022, that limit is $420,860 for single-family homes in Tulare, Kings, and Fresno counties. However, in high-cost areas of California, the FHA loan limit extends to $970,800.
To learn more about additional loan programs offered by Brendan Farrell and American Pacific Mortgage, click here
FHA Loan Benefits:
- A minimum of 3.5% down payment
- Flexible credit qualifying guidelines
- A minimum of a 580 FICO score required
- Can be paired with a down payment assistance program