A FHA loan is a mortgage that is insured by the Federal Housing Administration a government agency which is governed by the US Department of Housing and Urban Development. This is a great First Time home Buyer program. First Meridian Mortgage offers the FHA Program in Virginia, Maryland and Washington DC. This loan option was created as a means to help homeowners get easily accessible loans that are affordable with only a 3.5% Low down payment. This program was originally designed for low to moderate income borrowers, but after the financial crisis it has been used effectively by all income levels.
Check the Income and Jurisdictional Loan limits for FHA loans here.
A FHA loan is very popular for first time home owners, because the down payment with this type of loan is only 3.5%; instead of the costly 5 – 20% of a traditional loan. The down payment can be 100% gift from a family member. Also, all closing costs and Prepaids can be paid by the seller, realtor, lender or a gift from family member. There are also grant programs available from time to time that will help pay for the down payment. For some of these programs, the grant does not have to be paid back.
First meridian can also pay closing cost and prepaids on behalf of the borrower, only leaving the 3.5% down payment to get into the house. The seller and or realtor can also pay the prepaids and closing cost. Call First Meridian Mortgage and inquire about how to do a No Closing Cost Purchase.
Since the loans have the protection of the mortgage insurance, this allows for the interest rates to be slightly better than the average conventional loan. This allows the loans to be originated with less than perfect credit scores. FHA will consider a manual underwrite score in the mid to high 500’s. Different lenders will have overlays that vary from one lender to the next.
View the upfront and annual mortgage insurance premiums here.
Find out if your condo is FHA approved here.