FHA Loans

Available for single family and multifamily homes, FHA loans allow those who might not qualify for a conventional mortgage to obtain a loan, especially first-time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and a higher tolerance for debt to income ratio requirements.

How Do FHA Loans Work?

FHA home loans are mortgage loans that are insured against default by the Federal Housing Administration (FHA). Because FHA loans protect lenders against any defaults on payments, they can sometimes offer lower interest rates to qualified FHA loan borrowers.

FHA Loan Benefits

FHA loans are great options for first-time home buyers and offer several key benefits.
These include:

• Credit score requirements lower than other loans. FHA loans are typically available for those with a credit score of 580 or higher, although if your score is between 580-620, your loan request will need to be manually underwritten, which is a bit more stringent than usual.
• Ability to qualify even if you have had a bankruptcy or other financial issues in the past.
• Both fixed and adjustable rates in 30- or 15-year terms.
• Down payments as low as 3.5%.
• Seller contributions can be negotiated to as high as 6% of the purchase price, which would be more than enough to cover all closing costs.

These benefits and more make FHA loans a great fit for those looking for an alternative to Conventional mortgage financing.

What’s Needed to Qualify?

When looking to qualify for an FHA loan, there are a few points to consider. First, you must have a minimum 3.5% down payment and a minimum credit score of 580. These numbers are typically lower than other loan options, making them an appealing choice for some.

Additionally, you must have a debt-to-income ratio (DTI) of no more than 50% (although it is not unheard of to be approved with a DTI as high as 57%) and a steady employment history. You must also have enough money to cover closing costs. FHA’s upfront mortgage insurance premium (UFMIP) may be financed into the loan amount.

Find Your Loan Solution

For over 25 years, Butler Mortgage has worked with both first-time and seasoned buyers wanting to own a home in Central Florida. Let us help you find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form.