FHA Loan Options

FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA), which is part of HUD (Housing and Urban Development), ensures the loan. Approved FHA mortgage lenders, including banks, credit unions and various nonbanking institutions, issue these loans to qualified buyers.

The Benefits of FHA Loans

The FHA loan requirements are much less stringent than those for most conventional mortgage products, making it easier for low-income individuals and families and people with credit challenges to turn the dream of homeownership into a reality.

The FHA Mortgage Offers the Following:

• Low 3.5% down payment program
• All funds may come from an acceptable gift: FHA regulations regarding the acceptance of financial gifts for down payments from family members, employers and charitable organizations are more liberal than with conventional loans.
• Easier qualifying: While FHA may have lower minimum qualifying FICO scores, applicants must have a minimum FICO score of 580 in order to qualify for an FHA mortgage through Johns Creek Mortgage, LLC.
• Help with closing costs: Sellers can pay up to 6% of the buyer's closing costs, although some FHA loan lenders cap the seller's contribution at 3%.
• Higher debt-to-income ratio: This debt-to-income ratio (DTI) compares the total of prospective borrowers' monthly debt payments to their monthly gross income. When evaluating applicants for a traditional mortgage, a desirable DTI is up to 36%. With FHA loans, the standard figure is up to 43% with higher DTIs available with compensating factors.

Because lenders must assume a higher risk when issuing FHA loans, they will require you to carry mortgage insurance premium (MIP) to protect their interests. MIP covers the lender's losses if you default on your mortgage.

Important Notice:

Interest Rates and Maximum Loan-to-Value may be based on Credit Score, Property Type, Occupancy, Purpose, Investor, Insurer, Loan to Value and other factors. Additional investor, insurer and Johns Creek Mortgage, LLC's criteria/conditions apply to all products. Information provided is for illustrative general use only and does not contain all qualification and automated underwriting approval requirements. Johns Creek Mortgage, LLC reserves the right to change this information at any time. Meeting any of the criteria does not constitute a commitment to lend.