No one would fault you for thinking FHA loans are only for first-time home buyers. While the majority of buyers who pursue an FHA loan are indeed first time homeowners, being a first-time home buyer is not a requirement.
First, let’s clear up some misconceptions. The Federal Housing Administration (FHA) does not issue loans or lend money. The FHA insures mortgage loans that are made by qualified lenders, helping more people achieve home ownership.
An FHA mortgage can only be used for a primary residence, which is why it is widely used for first-time homeowners.
Now, here’s what you need to know. The guidelines for an FHA loan are more lenient than most others, requiring :
- a credit score as low as 580
- a minimum down payment of 3.5%.
Often, a down payment assistance program can be paired with your qualification to further assist the home ownership goal.
By allowing lower credit scores and lower minimum down payments, the FHA provides us purchasing power we might not otherwise have.
If you have been hesitant to explore home ownership, there isn’t a better time than now to explore what’s possible with a professional. Give me a call today.