- FHA Loan:
FHA mortgage loans are issued by federally qualified lenders certified by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.
FHA loans are an attractive option, especially for first-time homeowners:
- Generally easier to qualify for than conventional loans.
- Lower down payment requirements
- Cannot exceed statutory county loan limits
While HUD sets minimum qualification standards for FHA loans, lenders can vary widely in their approval guidelines and pricing for FHA loan products. Lenders add their own additional guidelines (often called "overlays") that impose additional restrictions on borrowers. These additional restrictions can prevent borrowers from being approved with some lenders even though they would be considered well qualified by others. Trustpoint Mortgage Loan Officers work with multiple lenders and are experts on these additional guidelines. This allows us to not only shop the best price for our clients, but also to place them with the lender whose guidelines are not in conflict with any challenges they may have in qualifying.
Standard FHA loans only require a 3.5% down payment and closing costs can often be paid by the lender or seller as part of the purchase contract. While 3.5% is the minimum down payment FHA requires on most products, it is important to understand that there can be additional closing costs which will increase the amount of cash required from buyers at closing. Trustpoint Mortgage Loan Officers understand how to help you minimize your cash outlay through both lender seller credits to pay your closing costs for you. It is important to understand these rules BEFORE making an offer on your new home in order to best plan to minimize your out of pocket expenses.