The FHA or Federal Housing Authority has stated that the down payment needed for them to back the loan is 3.5% of the amount. An FHA Loan is a mortgage that’s insured by the Federal Housing Administration…meaning they don’t actually loan the money, what they do is guarantee the bank that they will get paid if you default on your loan. This program allows borrowers to finance homes with down payments as low as 3.5% and are common with first-time home buyers.
So a $300,000 loan for example will require a $10,500 down payment from you.
Remember, this also means you apply and qualify for a FHA mortgage loan.
FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment. Even borrowers who have suffered from bankruptcy or foreclosures may qualify for an FHA-backed mortgage.
FHA Loan applicants must have a minimum FICO® score of 580 to qualify for the low down payment at 3.5%. If your credit score is below 580, the down payment requirement is 10%. We work with credit agencies and credit repair consultants to assist you in the process if you need to build your score up. Depending on where you are in the buying process, this can save you thousands of dollars.
- FICO® score at least 580 = 3.5% down payment.
- FICO® score between 500 and 579 = 10% down payment.
- MIP (Mortgage Insurance Premium ) is required.
- Debt-to-Income Ratio < 43%.
- The home must be the borrower’s primary residence.
- Borrower must have steady income and proof of employment.
See more on FHA Home Loans –>