FHA Loans

FHA Loan Information

The FHA loan program is designed to help first time home buyers finance their first home or people with less than perfect credit to also have a way to finance a home. If you have been through a financial crisis, chances are that your credit is “less than perfect” and the FHA loan program is designed for you! Depending on what type of crisis you have had (foreclosure, short sale, etc.), the waiting period will be different – but it is also important to remember that just because you may have waited long enough after the crisis doesn’t mean that you automatically qualify for a FHA loan.

Qualifying For An FHA Loan

Qualifying for an FHA loan after a financial crisis is generally the same as qualifying for an FHA loan for a first time home buyer – with some exceptions where you may need to elaborate on your situation more for the underwriter.

FHA is simply the insurer on an FHA loan, they are not the lender. That means that when you take out an FHA loan, you are going to be required to pay mortgage insurance – both up front when you get the loan as well as on a monthly basis.

Up Front Mortgage Insurance premium (UFMIP) on an FHA loan is currently 1.75% of your loan amount and if generally financed into your loan.

FHA Loan Highlights Include:

  • 3.5% down payment for new home purchases
  • Monthly mortgage insurance is required
  • Up Front Mortgage Insurance is required
  • No prepay penalty for any FHA loan
  • FHA loans allow seller to pay closing costs
  • 203k Renovation loan can be used to make repairs or renovations to the property being purchased
  • FHA loan refinance programs include the popular FHA streamline program, FHA 203k  and the FHA 85% cash out program

The main reason that FHA loans are popular with people who have had a short sale or foreclosure in their past is that the waiting periods are typically lower than other loan programs.

FHA Loan Waiting Periods

FHA loan after bankruptcy: The waiting period for getting an FHA loan after a bankruptcy  can be as little a  NO time after a chapter 13 discharge or 2 years after a chapter 7 bankruptcy as long as no real property was included in the bankruptcy. 3 years from the completion date of the short sale/foreclosure if it was included in the bankruptcy.

FHA loan after short sale: The waiting period for getting an FHA loan after a short sale can be as little as 2 years, but some lenders may make you wait longer depending on your overall credit profile.

FHA loan after foreclosure: The waiting period for getting an FHA loan after a foreclosure is 3 years after the foreclosure.

FHA loan after deed-in-lieu: The waiting period for getting an FHA loan after a deed-in-lieu is 3 years.

FHA Lenders: Find The Right One

FHA lenders are all approved and monitored by FHA to ensure that they are helping people get FHA loans according to the FHA guidelines. Finding the right loan officer at a great FHA lender can make all the difference when getting your loan done. Find a loan officer at an FHA lender now!