FHA Loans Open the Door to Homeownership
FHA loans are a type of nonconventional mortgage insured by the Federal Housing Administration, a division of the U.S. Department of Agriculture (USDA). These loans have minimal down payment and credit score requirements. They were designed to help clients with low to moderate income afford safe, affordable housing. At West Coast Realty Services, our mortgage professionals are skilled in all types of conventional and nonconventional loans. We represent the top, FHA-approved lenders in the country with the most competitive rates. If you’re interested in securing an FHA loan to buy a home in Lake Forest, Anaheim, Santa Ana, or nearby California, we’re here to help.
FHA Loan Basics
FHA loans were created after the Great Depression in the 1930s to create a path to homeownership for many clients who were recovering from financial strife. Today, they continue to help encourage private lenders to open their doors to a wider range of clients, including those with less-than-great credit, low to moderate income and who may not be able to raise the 20% down payment required by most conventional financing. They’re popular among first-time homebuyers and seasoned homeowners alike.
FHA Loan Eligibility
To determine if you’re eligible for an FHA loan and what down payment is required, we’ll look at your credit score. If you have a score of 580 or higher, you can qualify for as low as 3.5%. With a score of 500-579, you may still qualify for funding, but will need to provide a 10% down payment. It’s also important to note that you will need to provide upfront mortgage insurance premium, which is equal to 1.75% of the value of your loan. You’ll also pay an annual mortgage insurance premium, as well, for at least five years.
FHA Loan Income Limits in Orange County
In addition to your credit score, you’ll need to provide bank statements, W2s and other documents to establish your income and your ability to make your mortgage payments and cover other homeowners’ expenses. There are also income limits to consider. In Orange County, they are:
- $679,650 for a one-unit property
- $870,225 for a two-unit property
- $1,051,875 for a three-unit property
- $1,307,175 for a four-unit property
FHA Funding for Repairs
If you’re interested in purchasing a home in need of some repair, you may want to consider an FHA 203(k) loan. Like traditional FHA loans, these renovation loans provide financing for the purchase of a home and roll in the cost of repairs such as structural improvements, flooring, energy efficient appliance installation, and more. They have minimal down payment requirements and easy credit approval, just like traditional FHA loans.
We’ve got a Financing Solution for You
When it’s time to look for home financing, start with the pros at West Coast Realty Services. We have the local knowledge and colleagues in the community, like real estate agents and Realtors, so your home financing experience goes as smoothly as possible. Contact us to learn more about FHA loans and other types of conventional and nonconventional mortgages. We offer free quotes and are here to answer any questions you may have.