Below we have listed an overview of the National FHA loan program. FHA home loan mortgage details for 2017:
- FHA home loans require only 3.5% down payment for home purchases – up to 96.5% financing.
- FHA offers many flexible refinancing options for existing home owners. Learn about the new FHA Streamline Refinance.
- FHA home loans are secure and backed by the US Government and have NO prepayment penalty.
- Home buyers can use gift funds to help pay for down payment and closing costs expenses.
- Closing costs can also be paid by the seller of the home.
- Qualifying for an FHA loan with lower credit scores is possible. *Please note, current min. required credit score is 620 for max 96.5% FHA financing*
- FHA home loans are secure fixed terms at low market interest rates. Interest rates are very comparable to conventional loans that require a large down payment.
- No household income restrictions.
- FHA home loans are for ANY new & existing single family residence, town home or FHA approved condo. The property being purchased can be a regular sale, short sale, foreclosure home, etc. We currently DO NOT offer any financing on mobile, manufactured homes, vacation or investment homes.
- Co-signers and non-occupying home buyers are also permitted!
- Great for public service workers like Teachers, Firefighters and Police
- FHA HUD also offers a special $100 down home loan for select HUD owned homes only. Click the highlighted link ⇒ to read about the HUD 100 down program.
FHA Loan Limits:
FHA mortgages do have maximum loan amount limits depending on the county/location of your new home. Nearly all the counties in Florida & Georgia (and most the nation) have a maximum loan limit of at least $271,050. Some Florida counties to the south (Monroe County, Collier County, Broward County, Manatee County, Palm Beach County) have maximum loan amount limits of at least $420,000 and as has high as $729,750 in 2017. Please click here to look up your counties FHA loan limit.
FHA Mortgage Insurance:
FHA home loans require a one-time upfront mortgage insurance premium (UFMIP) of 1.75% that is rolled into the borrower’s loan. In addition to this, FHA home loans have a monthly premium as well. It’s important not to confuse the one-time upfront premium (UFMIP) and the monthly MIP.
The monthly premium depends on the loan terms (30 yr, 15 yr, etc) and down payment you choose. Please see the chart below of the new FHA monthly premiums as of 2017.
Example of the monthly mortgage insurance costs based on the chart above:
Sales price of your new home = $100,000
You have decided to use the FHA 30 year fix rate with a 3.5% down payment = $3,500
Loan amount = $96,500
Based on this scenario, your FHA monthly mortgage insurance costs (PMI) would be:
$96,500 x .0085 = $820.25. Now divide $820.25 by 12 = $68.35 your monthly insurance costs.
NOTE – the following changes are effective for all mortgages with FHA case numbers assigned in 2017:
- Revision to the period for assessing the annual mortgage insurance premiums (MIP)
- Removal of the exemption from the annual MIP for loans with terms of 15 years or less and loan to values of less than or equal to 78 percent at origination.
- Increase in the annual MIP for mortgages with terms less than or equal to 15 years and LTV ratios less than or equal to 78 percent at origination.
The table below shows the previous and the new duration of annual MIP by amortization term and LTV ratio at origination: This is the time you would be eligible to cancel and drop the monthly MIP.
|TERM||LTV (%)||PREVIOUS||NEW- 6/3/13|
|≤ 15 yrs||≤ 78||No annual MIP||11 years|
|≤ 15 yrs||> 78 – 90.00||Cancelled at 78% LTV||11 years|
|≤ 15 yrs||> 90.00||Cancelled at 78% LTV||Loan term|
|> 15 yrs||≤ 78||5 years||11 years|
|> 15 yrs||> 78 – 90.00||Cancelled at 78% LTV & 5 yrs||11 years|
|> 15 yrs||> 90.00||Cancelled at 78% LTV & 5 yrs||Loan term|
Example for calculating the one-time 1.75% upfront Mortgage Insurance Premiums (UFMIP):
Sales price of your new home = $100,000
Min. FHA down payment required is 3.5% = $3,500
Loan amount = $96,500
One time upfront FHA mortgage insurance premium of 1.75% ($1,688.75) added to your loan:
$96,500 + $1,688.75 = $98,188.75 your new final adjusted loan amount.
*Please be sure to check out and bookmark the handy FHA Mortgage payment calculator on the right side of your screen. This monthly loan payment calculator figures up the mortgage insurance costs automatically. In addition, it includes monthly real estate taxes and home insurance.
Note – the upfront (one-time) 1.75% FHA mortgage insurance premium can be paid separate or financed into the loan. This fee is most commonly financed or “rolled into” your new loan as stated in the example above. Please also note the figures above do not apply to the FHA streamline refinance. Please contact us.
FHA Credit Requirements:
Credit requirements for all home loans have been changing rapidly over the past few years. Most FHA lender, banks or brokers currently require a 620 minimum credit score for the maximum 96.5% financing. The required minimum FHA credit score is slightly less for those home buyers that are putting at least 5% or more down payment. These minimum FHA credit score requirements alone do not guarantee FHA financing as there are certain separate requirements in place regarding bankruptcy, judgments, short sales and past foreclosures. As stated above the FHA credit requirements do change frequently, so feel free to submit your information request form (on the upper right side of your screen) and ask our FHA Loan Specialist for the latest credit requirements.
FHA Non Occupying Co-Borrowers & Gift Funds:
FHA will permit a co-signer that is not living in the home, unlike conventional loans in which the borrower needs to meet certain qualifying ratios even if they have a co-signer. This can be an advantage for first-time home buyers that need some additional income to help qualify. However, co-signers with good credit cannot overcome the bad credit of the primary borrower. This means the qualifying credit score used will be the lower of the primary borrower and co-signer. The co-signer is generally required to be a family member or guardian.
With FHA home loans, 100% of the co-signers income can be used no matter how much money the borrower makes. This also can help the borrower to achieve the maximum FHA loan limit depending on what county that they are purchasing. Each county has different FHA loan amount limits. By having a co-signer, this can help those borrowers that might have some income that they cannot properly document, knowing they can still make the higher mortgage payment. One thing to keep in mind is that co-signers debt is also used in this equation. If their debt is extremely high, the co-signer might not help the situation.
As for gift funds, FHA does permit the home buyer to use gift money for their down payment. Generally the buyer will need to provide proof of the gift funds (canceled check, deposit proof, etc) in addition a gift letter will be needed showing no repayment of the gift is necessary.
We are always happy to answer your questions about the latest FHA home loan mortgage details and assist you with your FHA loan application pre approval. To fast track your request, please fill out the short information request form (located on the right side of your screen) Mobile phone users – please find the Info Request at the bottom of your page. Applicants can also call ph: 904-302-6060
We typically respond to all submitted Info Request forms within 15 min during regular business hours.
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