FHA Loans and FHA Mortgages in Green Bay, Wisconsin
What is an FHA loan? Well, it may be better to start out with explaining where it originated from first. During the Great Depression of the 19030’s the United States housing market was turning for the worse. So in 1934 the National Housing Act was passed by Congress. This created the Federal Housing Administration – the FHA. So, fast forward to today’s time, the FHA purpose is still to help low-to-moderate income potential home buyers.
FHA Loans for First Time Home Buyers
Did you know that statistics show that 46% of first time home buyers use FHA mortgages? FHA guidelines for potential home buyers are more relaxed than conventional loan requirements, mainly the lower credit score and lower down payment. Those 2 particular things easily attract first time home buyers.
FHA Loan Credit Score and Down Payment Requirements
Credit scores of 580 or above only a 3.5% down payment is required. Credit scores between 500-589, you can put down 10% for a down payment.
FHA Loan and FHA Mortgage Candidate
Who are the best candidates for the FHA loan?
1. Potential home buyers with a low credit score
2. If you have a high debt to income ratio (debt to income ratio must be lower than 50%, however)
3. You can’t afford (or don’t want to) a 20% down payment
4. There is a possibility that you will be receiving your down payment as a gift.
Think you might be a good candidate for an FHA loan? Make sure to choose a lender that has experience and knowledge with FHA loans and their specific guidelines. The mortgage officers at Executive Mortgage are experts in FHA loans so make sure to give Executive mortgage a call, we always have competitive rates!