The Federal Housing Administration, or FHA, was created in 1934 as part of the National Housing Act. This government agency has made sure that loans made by banks and other private lenders for home building and home buying are insured. The objective of this organization is to improve housing conditions and standards, provide a functioning home financing system, and stabilize the mortgage market.
The FHA does not set a required minimum credit score in order to be applicable for an FHA loan but instead, each borrower’s credit in considered together. These loans have some leeway, even if you have filed for bankruptcy before, but lenders can implement their own requirements on top of those already in place. For example, some may require a minimum credit score.
Since 2005, the FHA loan Program has seen a 900% growth. Some key changes have been made, making it more popular than it has ever been. FHA maximum loan limits have been raised across the board and housing prices are in a slump. This means that a higher percentage of homes qualify for FHA financing than ever before!
These FHA Loan requirement changes mean millions more can now qualify for an FHA Loan, one of the best choices for prospective home buyers in today’s mark
Important Information to know:
3.5 percent down payment of the purchase price
Low monthly mortgage insurance
Low, government-capped closing costs
Relaxed credit score requirements
Quicker qualify post-bankruptcy
Allows For Blemished Credit History:
In today’s tight lending environment, an FHA is often the best choice for borrowers with past credit issues. Most borrowers find it is a lot easier to apply for an FHA loan. Borrowers can have lower FICO scores, some blemishes on credit and don’t need to put as much money down.
Lower FICO scores are accepted
FHA loans require 2 years waiting period between bankruptcy, 1/2 the time as a regular loan
FHA loans require 3 year wait period after foreclosure, as opposed to the 4 for a regular loan