FHA Loan Program

It's easy to understand why many people looking for a new home are considering FHA-insured loan programs. Because the Federal Housing Administration insures FHA Loans, homebuyers can easily qualify for a mortgage. Those who typically benefit most from an FHA loan are first-time home buyers and those with less-than-perfect credit.

As FHA Loan specialists, we can help you understand any new changes to the FHA loan program. We're here to create a customized solution that works best for you and your family.

At Nexa Mortgage, we want to help you understand how an FHA mortgage loan works. The Federal Housing Administration (FHA) doesn’t loan any money; they insure it. This means that you’re considered a less risky borrower than someone who might not have the federal government's backing. Our role is to ensure you qualify for an FHA mortgage and structure our loan to reflect it.

The other pages in the FHA loan center can help you understand more about this unique program. Whether you are trying to determine if you qualify or are interested in finding out what kind of documentation you’ll need to get your loan, ultimately, our site can provide you with the information you seek. 

The official Housing and Urban Development website is essential for considering an FHA loan. There, you can find even more answers to questions and learn more about insuring your loan through the Federal Housing Administration.

FHA-insured mortgages are some of the best kinds of mortgages available. This is because they can help more people in the home-buying market. Check out the list below to understand some of the essential benefits of an FHA mortgage.

Easier to Qualify for – because the federal government backs them, lenders are more likely to give you the loan you need.

Low Down Payment – FHA-insured mortgages only require a 3.5% down payment (580+ Credit Score), which makes it easier for people to own homes. The 3.5% can also come in gifts, unlike many other loan programs. Specific Lenders Might also offer Down-Payment Assistance Programs that cover the 3.5% downpayment, allowing you to use your funds to cover other expenses.

Lower Credit Borrowers Qualify – because the government backs FHA-insured loans, those with a poor credit history have an easier time getting this loan.  With a 10% downpayment, you can possible qualify for an FHA Loan with down to a 500 credit score.

Better Interest Rates – with the government's backing, these loans typically have a better interest rate than most traditional mortgage loans.

Better Home Stability – the FHA has programs to help homeowners keep their homes during hard times. They will work with you to help you avoid falling into foreclosure. Always work out problems with your lender before the situation becomes dire.

When applying for an FHA loan, the following list of documents will help expedite the process. We can help you understand any part of the FHA loan process, so don't hesitate to contact us with any questions.

Employment Info

• Past two years completed tax returns.
• Past two years' W-2s, 1099s, and other necessary tax forms.
• Two month's worth of the newest pay stubs.
• Self-employed will need three years of tax returns and a YTD Profit and loss Statement.

Savings Info

• Past three months' complete bank statements for all accounts.
• Any recent statements from investment accounts (retirement, 410k, mutual funds, etc.).

Personal Info

• Driver's License or other official State identification.
• Social Security Card.
• Any Divorce, Palimony, Alimony Documents.
• Green card or work permit (if applicable).

Check out our list of common questions related to FHA mortgages. Check out our list of common questions related to FHA mortgages.

What is the FHA?

• FHA stands for the Federal Housing Administration. It was created in 1934 to help Americans get into homes.

What makes a FHA-insured mortgage beneficial?

• A FHA-insured mortgage is easy to qualify for, can be obtained with less than perfect credit, costs less, and requires a smaller down payment.

Where can I find FHA forms and other literature?

• an excellent source for FHA forms and information is https://www.hud.gov/topics/buying_a_home.

What is the FHA loan limit in my area?

• The loan limit across the country is different. Click here to see limits in your area.

Can I pay an FHA loan early?

• Yes, however, be sure to check the pre-payment section of your contract before signing.

Can an FHA-insured loan help me lower energy costs?

• Yes, through the Energy Efficient Mortgages Program, you can finance 100 percent of the cost of making your home more energy efficient. Contact us to see how.

Is there a FHA program to help me refinance my loan?

• Yes, the recently created FHASecure is one of the ways that we can help you refinance your current home loan. Contact us now to see what we can do for you.

Can I refinance a fixed-rate FHA loan?

• Yes. Talk with one of our professionals today to see if refinancing makes sense for you.

What is the recommended debt-to-income ratio for FHA loans?

• The recommended debt-to-income ratio for a FHA loan is 30%.

Are FHA loans assumable?

• Absolutely, you can assume an existing FHA loan or allow a buyer to assume yours.

Will I have to pay mortgage insurance with an FHA loan?

• Yes, FHA mortgages often require you to carry mortgage insurance longer than most conventional loans.

Can I get a "fixer-upper" of a home with a FHA mortgage?

• Yes, however, you might be required to fix specific problems in the home before you can get the loan. Please speak with us today for details on this.

To qualify for an FHA loan, a borrower typically needs to meet this criteria:

• Proven employment status of at least two years.
• Steady or increasing income over two years.
• History of on-time payment. No more than two missed payments on your credit.
• If you've filed for bankruptcy, you must wait at least two years and have good credit since you filed.
• Those with foreclosures must wait at least three years since the most recent foreclosure.
• Monthly mortgage payment should be roughly 30% of your gross income.
• You must pay a minimum of a 3.5% down payment. (Lenders can assist if the DPA Program is available to qualifying borrowers)
• Only specific properties are eligible - single-family homes, condominiums, double-wide manufactured homes, modular homes, and 2-4 unit properties.
• The property must be your primary residence.

You might qualify for an FHA Streamline Refinance if you already have an FHA mortgage. An FHA Streamline Refinance is an excellent way for a borrower with an existing FHA-backed mortgage to reduce their interest rate, payment, or possibly both.

Here are some cool facts about an FHA Streamline Refinance:

• No Appraisal is Required – because your existing FHA loan already guarantees your loan, the FHA will allow you to use your home’s original purchase price as your home’s current value.
• You can still refinance even if you are underwater – even if you owe more than your home is worth, you might still get an FHA Streamline Refinance loan.
• There is no FHA prepayment penalty to worry about.
• FHA Streamline refinance rates are the same as “regular” FHA loan rates.
• Employment verification is not required with an FHA Streamline Refinance – in other words, no paystubs, W-2s, or tax returns are required for approval.
• Income verification is not required with an FHA Streamline Refinance
• Credit score verification is not required with an FHA Streamline Refinance – instead of checking your credit, your payment history is used to determine whether you qualify. You must have no late payments in the last 90 days and only one or fewer late payments within the previous 12 months.

Streamline Refinance applicants must demonstrate a Net Tangible Benefit in the refinance or, in other words, a legitimate reason for refinancing. For Example:

• Refinancing from an Adjustable Rate Mortgage to a Fixed Rate Loan.
• or Reducing your principal + interest + mortgage insurance 5 percent or more.

The FHA prohibits increasing a Streamline Refinance's loan balance to cover associated loan charges. The new loan balance may increase but only by the cost of the Upfront Mortgage Insurance Premium. All other expenses- origination charges, title charges, escrow charges- must either be paid by the borrower as cash at closing or credited by the loan officer in full.

These materials are not from HUD or FHA and were not approved by HUD or a government agency, and in some cases, a refinance loan might result in higher finance charges over the life of the loan.