FHA Mortgage Loans
An FHA mortgage is one that is insured by the government, but can be made by any mortgage bank. The Federal Housing Administration has created a pool of mortgage insurance that is available to those who need a mortgage but don’t have much in the way of a down payment. The FHA mortgage has the smallest down payment requirement at 3.5%. The down payment can also come from a family gift, grant program, or employer sponsorship, which is not the case with the conforming loan.
Another key feature of the FHA mortgage is that it’s much more forgiving for borrowers with lower credit scores. Not only is the FHA mortgage easier to qualify for, but it will price out with a better interest rate for a lower credit score borrower.
One thing to keep in mind is that FHA loans have some stricter property requirements than the conforming mortgage. An FHA mortgage will not allow you to buy a house that needs a new roof, or requires significant material improvements. Basically, you can use this loan for buying “cosmetic fixers”, but not for a real big project fixer.
Many people assume that an FHA mortgage is only for first time homebuyers and this is not true. Anyone can access this loan if they want to, and there are no income limitations.
FHA mortgages can only be used for your primary residence. Also, FHA loans ALWAYS have mortgage insurance. Even if you put 20% down, the FHA mortgage will be FHA insured. So borrowers with bigger down payments usually do not get one of these government insured loan products.
FHA Loan Limits for Portland Oregon as of July 2010 are:
- 1 Unit: $418,750.00
- 2 Unit: $536,050.00
- 3 Unit: $648,000.00
- 4 Unit: $805,300.00
***2010 FHA UPDATE!: New rules, and Mortgage Insurance Pricing changes***
At my company Mortgage Trust, Inc we have the ability to underwrite, document, and fund FHA Mortgages right here in Portland. We control the entire process from end to end while also having pricing flexibility of sending the funded loan to a variety of mortgage servicers. This gives you the service advantage of a direct bank lender, with the pricing advantage of a broker.
To stay up to date with the changes on this very powerful mortgage program, I have developed an FHA Mortgage informational Facebook Group. Check it out!
Please fill out the online loan application to find out how the FHA mortgage program could work for you.
