Member:
FHA
The original first time homebuyer program. 3% down. Very flexible qualifying, gift allowed for down payment and closing costs. Some credit problems allowed. No maximum Income. Maximum Loan for a single family home or condo is $697,500.
What is a Federal Housing Administration (FHA) Loan?
The Federal Housing Administration (FHA) was created by the National Housing Act of 1934 to help revive and stabilize a housing market devastated by the Great Depression and the breakdown of the banking system. It did so by providing federally backed mortgage insurance, first for construction loans and then long term mortgages. By meeting credit history and down payment criteria established by FHA, a borrower can obtain a 30 year fully amortizing mortgage loan. FHA offers fixed or adjustable, assumable loans.
The Department of Housing and Urban Development (HUD) authorizes the Federal Housing Administration (FHA) to insure lenders against foreclosure loss for any residential mortgage that does not exceed Congressionally set loan amounts. Eligibility FHA financing may be used by any qualified person, whether or not a US citizen. However, the property must be the borrower's principle residence; the borrower must live in the home. The borrower must also have a social security number.
Advantages of a FHA Loan are the following:
Low down payment, Minimum 3%, however, some programs are available to lend qualified borrowers up to 100% of the purchase price for the down payment and closing costs (see below).
FHA maximum loan amount for San Diego County is $697,500. Loans available are a 30 Year Fixed, a 15 year Fixed, and a One Year ARM with a 1% annual cap and a 5% lifetime cap. The monthly principal and interest payment on a One year ARM (adjustable rate mortgage) can fluctuate based on the index (1 year Treasury Bill), and it has a 1% annual cap and a 5% lifetime cap. ARM margins vary between 2% and 3% depending on cost.