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FHA Loans Available Soon at DCU
Are you dreaming of owning a home, but don't qualify for a
traditional mortgage that requires a large down payment or private
mortgage insurance (required by lenders when a homeowner
obtains a loan for more than 80% of the home's value)? An FHA
loan may be your key to homeownership. It makes homebuying
easier and less expensive than other types of real estate mortgage
loan programs.
What Is an FHA Loan?
An FHA loan is a federal assistance mortgage loan insured by the
Federal Housing Administration. The FHA loan program began in
1934 to help people with low incomes become homeowners during
the Great Depression. FHA loans are an ideal way to help first-time
homebuyers or people who want to purchase a fixer-upper home.
The program aims to help many people who can otherwise not
afford a home, but it has guidelines in place to reduce the risk of
subprime mortgage problems. The FHA does not make the loans –
only qualified lenders, such as DCU, can offer FHA loans to
homebuyers who fit the loan criteria.
Easier for Homebuyers to Qualify
Because FHA loans are insured by the government, homebuyers
can qualify for them more easily than traditional mortgages. New
easier qualifying guidelines include:
- No minimum FICO score or credit score requirements
- Higher debt ratio allowed than other home loan programs
- Less than two years of employment is acceptable, and selfemployed
individuals are eligible to apply
These new advantages make an FHA loan one of the best options
for many first-time homebuyers as well as move-up homebuyers.
However, it's important to note that creditworthiness of potential
borrowers must still be determined to ensure the potential
homeowner can afford the home (this helps protect the buyers
and DCU).
Homebuyer Benefits
FHA loans offer low down payments and closing costs. For example,
a down payment for a homebuyer can be less than 3% of the
purchase price and most of the closing costs and fees can be
included in the total loan amount. In addition, a gift for a down
payment or closing costs is allowed, or the seller can credit up
to 6% of the sales price toward the buyer's costs.
Coming Soon!
Look for a web announcement at dcu.org when FHA loans
are available.
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