Understanding Your FHA Options
April 20, 2023
An FHA mortgage provides homeowners with a fixed and adjustable-rate program; the downpayment or closing costs on the property may be a gift or a 401K loan. When applying for an FHA mortgage, there are no income limits, a credit score can be as low as 500, and it is not limited to first-time homebuyers.
Additional details to know about an FHA Mortgage include:
- A 6% Seller Concession is allowed
- Grants are also allowed
- Foreclosure (or short sale) is okay after three years of discharge
- Bankruptcy is okay after two years from the day of the discharge
- 1-4 family properties are okay (condos are okay, too, if approved)
- Flexible ratios are involved
- 203K loans are available
FHA – NHF Sapphire Program
For low-to-moderate income homebuyers, the FHA – NHF Sapphire Program is available. This grant program helps to make a down payment and/or closing costs much easier since it provides 3.00% or 4.50% off the first mortgage total loan amount so that it’s possible to make that payment.
Unlike a standard FHA, some of the program’s basic requirements include but are not limited to:
- 620 minimum FICO, DTI (up to 50%)
- Income limits: 115%of Area Median Income
- The borrower must occupy the property as the primary residence
- A minimum of one borrower must have Homebuyer Counseling, and more
As for some of the benefits of the FHA – NHF Sapphire Program, members can look forward to:
- Seller credit of 6% is allowed
- The borrower(s) is not required to be a first-time homebuyer
- No repayment of the DPA Gran is required
- The grant can be used for the down payment and/or closing costs
Another option for those eligible for an FHA loan is the FHA Alternative loan. Thanks to Freddie Mac Home Possible® and Home Possible Advantage Freddie Mac Home Possible and Home Possible Advantage, the FHA Alternative loan offers low-to-moderate-income borrowers and first-time homebuyers a flexible source of funds, as well as low down payments.
Additional details to know about an FHA Alternative loan include:
- The borrow’s funds are not required for the down payment on a 1-unit residence
- The borrowers are not required to be first-time homebuyers
- A homeownership educations course is only necessary for first-time homebuyers
- 1-4 unit primary residence
- As little as 3% down payment for fixed-rate; 1-unit purchase or rate/term refinance
- As little as 5% down payment for ARMs or 2-4 unit purchase or rate/term refinance
Residential and Commercial Loans in New York
Family-owned and operated Superior Mortgage Co., Inc. has been serving the Hudson Valley for over 30 years, specializing in residential and commercial loans. If you’re purchasing a home or refinancing your current home, or you need a home equity loan (even if you have credit problems), call us at (845) 928-2845 — we look forward to helping you!