FHA Home Loans

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FHA Loans: Affordable Homeownership Options with Cap One Lending

FHA loans, insured by the Federal Housing Administration, are designed to make homeownership more accessible. Ideal for first-time homebuyers or those with lower credit scores, these loans feature flexible qualification requirements and affordable terms.

What is an FHA Loan?

An FHA loan is a government-backed mortgage that provides flexibility for borrowers with limited down payments and moderate credit histories. Compared to conventional loans, FHA loans are often easier to qualify for, making them a popular choice among buyers.

Key Features of FHA Loans:

  • Lower credit score requirements (minimum median score: 600).
  • Down payments as low as 3.5%.
  • Competitive interest rates.
  • Ability to use gifted funds for down payments.
  • Seller or lender contributions to closing costs allowed.

Benefits of FHA Loans

  1. Low Down Payments: Qualify with as little as 3.5% down.
  2. No Prepayment Penalties: Pay off your mortgage early without extra fees.
  3. Flexible Property Options: Buy a single-family home, condo, townhome, or even a manufactured home on a permanent foundation.
  4. Multi-Unit Potential: Purchase up to a 4-unit property, provided you occupy one unit as your primary residence.
  5. Streamlined Refinancing: Skip the appraisal process with FHA streamline refinances, saving time and money.

FHA Loan Limits for 2025

       Low-Cost Area      High-Cost Area  
1 Unit      $524,225      $1,209,750  
2 Units      $671,200      $1,548,975  
3 Units      $811,275      $1,872,225  
4 Units      $1,008,300      $2,326,875  

FHA Loan Guidelines

  • Loan-to-Value (LTV):

    • Up to 96.5% for purchases.
    • Up to 97.75% for rate-and-term refinances.
    • Up to 80% for cash-out refinances.

  • Loan Terms:

    • Fixed-rate loans: Terms ranging from 10 to 30 years.
    • Adjustable-rate mortgages (ARMs): 5-year options available.

  • Mortgage Insurance:

    • Includes upfront mortgage insurance (UFMIP) and monthly premiums.

  • Debt-to-Income (DTI) Ratio:

    • Standard DTI of 43%, with possible approvals up to 60% for qualified borrowers.

  • Occupancy Requirements:

    • Must be your primary residence.

Resources for FHA Loan Information

For detailed guidelines and updates, explore these FHA resources:

Get Started with Cap One Lending

Ready to make your homeownership dreams a reality? At Cap One Lending, our FHA loan specialists are here to guide you every step of the way. Contact us today to explore your options and lock in competitive FHA rates!

 

Apply Now!