If you’re looking for an FHA home loan, we’re here to help!
Gulf Coast Bank Home Loans offers FHA mortgage loans in areas we serve including metro New Orleans & Baton Rouge as well as Tennessee, Florida & Texas.
FHA - Helping Borrowers Realize Homeownership Dreams
If you’ve been thinking about purchasing a home but have limited funds for a down payment, an FHA loan may be the tool which helps you finally achieve your dream of owning a home.
FHA loans are insured by the Federal Housing Administration (FHA). The requirements for qualifying for an FHA loan are generally more flexible than conventional loans when it comes to credit and down payment requirements.
How FHA Loan Works
FHA loans are backed by the Federal Housing Administration. This government backing may result in an offer of a lower interest rate and more flexible underwriting rules.
The maximum FHA loan amount is determined by two factors. Annually, the Federal Housing Finance Agency (FHFA) sets the maximum loan limits for Fannie Mae and Freddie Mac. FHA generally follows the FHFA loan limits in most jurisdictions. For a complete listing of maximum loan limits for your area, check the FHFA’s website for details.
Who Is Eligible For an FHA Loan?
An FHA loan is a popular choice among first-time homebuyers. However, you don’t have to be a first time homebuyer to get an FHA loan.
If you have less than a 20 percent down payment, an FHA loan may be a good choice for you.
What are the Qualifications for an FHA loan?
To qualify for an FHA loan, you must meet FHA eligibility standards, which include, but are not limited to the following:
- Down payment of 3.5%
- Use the home as your primary residence
- The property must meet FHA’s minimum property guidelines
What You Should Know About FHA Loans
To help fund the obligation of the FHA to repay lenders if the loan defaults, they charge the borrower a fee. This fee is called a “mortgage insurance premium” and may be paid in two ways:
- Upfront mortgage insurance premium – This insurance premium is percentage of your loan amount, paid in a lump sum due at closing and, and may be financed into the loan or paid in cash at closing.
- Annual mortgage insurance premium - This annual premium is a monthly mortgage insurance payment that varies depending on the amount of down payment.
FHA Appraisal Requirements
An FHA appraisal determines the value of the property and ensures that it meets the FHA’s minimum property requirements and must be completed on all properties that are purchased with an FHA loan. An appraisal is used by the lender to determine whether the sales price is supported by the current market, and if the property is eligible for FHA financing.
FHA-approved appraisers will assess the property to determine if it is eligible for financing by looking at many factors including:
- Confirm the home’s worth by reviewing its market value
- The physical condition of the property, noting any necessary repairs
- The expected life of the property, if it will last as long as the term of the mortgage
- Determine if the property is free of hazards, physical defects, etc.
- Assess the living spaces for structure and functionality to ensure its livable
Benefits of An FHA Loan
FHA loans offer many benefits including:
- Lower credit score requirements compared to other loan options
- A 3.5% down payment requirement
- Flexible terms
- No prepayment penalty
- No minimum income requirements
- If the FHA loan is paired with a bond or soft second program, then income limits may apply.
- Gift funds may be used to cover down payment and closing costs
Do you have any questions?
Gulf Coast Bank Home Loans has branches in metro New Orleans and Baton Rouge as well as Loan Production Offices in Tennessee, Florida & Texas.
If you are ready to get started, you can pre-qualify today.