FHA Mortgage
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Summary
FHA stands for Federal Housing Administration, the government agency that insures FHA mortgages issued by FHA-approved mortgage lenders. Historically these loans have helped lower income Americans receive home financing. FHA mortgage requirements are therefore typically more lenient than those of other loan programs.
Features
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You don't need to be a first-time home-buyer to be eligible for this loan
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Credit scores as low as 500 OK for those with a 10% or more down payment. For those with less down payment, 580 credit score is OK
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Down Payment as little as 3.5%
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Easier to qualify with derogatory credit and higher debt-to-income ratios
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Loan limit up to $679,650 in Honolulu County
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Mortgage Insurance can be cheaper than Conventional Mortgage Insurance for credit-worthy borrowers
Requirements
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Upfront Mortgage Insurance Premium (UFMIP) of 1.75% of the base loan amount (can be financed into new mortgage).
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Monthly MIP (annual mortgage insurance premium that is paid in 12-month installments) is currently paid on all FHA loans except those with terms less than or equal to 15 years and down payments greater than or equal to 22%
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Monthly MIP is paid on all loans with less than 10% down payment for the life of the loan
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Monthly MIP can be canceled on loans with 10% or more down payment after 11 years and 78% LTV
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Must occupy property as a primary residence. 2-4 Unit properties are acceptable as long as you occupy one unit as a primary residence
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Condominiums must be FHA-approved