FHA Loan

The Federal Housing Administration (FHA) was established in 1934 as a response to the banking crisis of the 1930s. The purpose of the FHA was to not only improve and stimulate the housing market, but to protect mortgage lenders from borrowers defaulting on their mortgage payments. 4.8 million single family mortgages are currently insured by the FHA and over 34 million home mortgages have been insured since its inception. 360 Mortgage Inc. has been providing FHA loans to the residents of Liberty, Kearney, and Kansas City, Missouri for over 11 years. 

An FHA Loan is simply a mortgage loan insured by the Federal Housing Administration. FHA Loans have gained increasing popularity with first-time home buyers as they tend to be one of the easier mortgage loans to qualify for. FHA loans are available for both purchases and refinances. Borrowers with existing FHA loans can take advantage of cash out refinance and streamline refinance programs. There are even reverse mortgage options available to seniors through the FHA’s Home Equity Conversion (HECM) program. 

Low down payment options and relaxed credit requirements contribute heavily to the growing popularity of FHA loans. A borrower could potentially qualify for an FHA loan with a down payment as low as 3.5%. Perfect credit is not needed either and borrowers may qualify with a minimum credit score of only 580. FHA loans are also assumable which means that if you were to sell your home, the buyer can take over, or “assume” the loan.

FHA Loan Requirements
  • Minimum Credit Score - A credit score of a least 580 is required. If you have a credit score between 500 and 579, you may be able to qualify with a higher down payment. 
  • Income Requirements – A debt-to-income ratio of 43 percent or less is generally required. A debt-to-income ratio of 45 percent may be approved in special cases.
  • Down Payment – A minimum down payment of only 3.5 percent of the purchase price is required. 
  • Property Requirements – The property being purchased must meet certain safety, security, and soundness (structural integrity) requirements. An inspection will be performed by an FHA-approved appraiser. 
There are also two types of mortgage insurance premiums (MIP) that must be paid with an FHA loan. 
  • Upfront mortgage insurance premium – A premium of 1.75% of the home loan is required upfront. This insurance can be paid at closing or rolled into the mortgage itself. 
  • Annual mortgage insurance premium – A monthly insurance premium based on loan-to-value (LTV) ratio, loan amount, and length of the loan. This can range between .80% and 1.05%.
The maximum loan amount available for FHA loans is limited by county.
 
County Single-Family Duplex Triplex Fourplex
Clay $278,300 $356,250 $430,650 $535,200
Jackson $278,300 $356,250 $430,650 $535,200


As a local mortgage broker, 360 Mortgage Inc. is able to offer some of the lowest rates on FHA loans in Missouri.  Whether you are purchasing a home in Liberty, or are looking for a lower rate on an existing FHA loan, we work closely with each and every client to offer an FHA loan that meets all of your needs. Contact us today to see how we can help you.


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