If you’re a first time home buyer, you might want to consider a FHA loan. Some advantages of this type of loan include: a smaller down payment and even a lower credit score.
What does FHA Approved mean?
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. They require lenders and properties to be approved by the agency in order to do business based on their guidelines.
What are the benefits of an FHA Approved loan?
A low down payment requirement of just 3.5% of the purchase price.
Lower credit score requirements.
Sellers can contribute more to closing costs – up to 6% (vs 3% in a conventional loan).
What does a FHA Approved CONDO mean?
Because of the guidelines set by the FHA, buyers of condominiums are especially restricted on what and where they are allowed to purchase. Buyers will be considered ONLY if they are on the FHA approved list.
Here are some basic guidelines on an FHA Approved Condo building:
All units and facilities and phases inside the project must be 100% complete.
Delinquent Dues: no more than 15% of units can be arrear more than 60 days.
At least 50% of total units must be sold prior to endorsement.
No more than 50% of the units can be rental/investor owned.
No more than 50% concentration of FHA loans.