What is an FHA Loan?
- Insured, not issued, by FHA
- Helps first-time home buyers
- But, not limited to first-timers
Benefits of an FHA Loan
- As low as 3.5% down
- Easier loan qualifying
- Marginal credit acceptable
Why United Home Loans?
- Local to Chicagoland
- Work with a dedicated loan expert
- Independent, family-run firm
FHA Loans Explained in 90 Seconds…
What does FHA stand for?
Federal Housing Administration; FHA is part of HUD, which stands for the Department of Housing and Development (we love our acronyms in the mortgage industry!)
What is the loan limit for FHA loans in the greater Chicago market?
The current FHA loan limit for a single-family house or condo is $365,700. For a complete list of loan limits for FHA loans in the greater Chicago market for 2, 3 and 4-unit properties, click here.
How does FHA mortgage insurance work?
FHA requires a two-part mortgage insurance structure with an upfront premium and an annual premium which cannot be cancelled. The upfront mortgage insurance premium (UFMIP) is 1.75% of the loan amount and the annual premium is .85% for 30 year FHA loans with less than 5% down. Click here for a detailed chart of mortgage insurance premiums for different FHA loan types.
What is the minimum credit score for FHA loans?
If a borrower has a credit score of 580 or more, they qualify for the maximum financing permitted by FHA which is 96.5% of the sales price of the home. However, many lenders have additional requirements for credit scores. A common minimum credit score required by many lenders is 620.
Does FHA allow family members to provide gifts for the required down payment?
Yes. The FHA loan program allows the entire down payment to be gifted from a family member. The donor will have to complete a gift letter and provide proof of withdrawal to document the gift funds. So, if you have a rich uncle, give him a call – gift funds are very common for most first-time buyers.