The FHA loan guidelines are more relaxed than conventional loan guidelines -- and this includes less strict regulations about past bankruptcies and/or foreclosures, job requirements, use of alternative credit, and debt-to-income ratios. The FHA ensures that their interest rates remain competitive with the interest rates of conventional loans.
FHA loans were originally created to help first-time buyers. People who are not first-time buyers may qualify; however, the FHA does not allow anyone to have more than one FHA-insured loan at a time.
The borrower is required to pay an insurance premium up front, but this premium can be financed into the loan amount directly. The borrower must also pay a monthly premium, which is 5% of the total loan amount divided equally over 12 months. Unlike a conventional loan, the FHA requires a termite report and clearance, as well as a few other property condition standards, to qualify for a loan.
If you would like more information about the benefits of an FHA loan, please complete the FHA home loan form.
You may refinance a conventional loan to an FHA loan.
Options include: Cash-out Refinancing, Rate Refinancing or Term Refinancing. The FHA offers borrowers debt-consolidation programs as well as the option to consolidate two mortgages into one FHA mortgage. The benefits of FHA loans, such as low closing costs and more relaxed credit and income qualifications, also apply to FHA refinances. Streamline refinancing is the only type of FHA refinance that requires the original loan to be FHA-insured.
If you would like more information about the benefits of a FHA refinance, please complete the FHA refinance form.