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Understanding Your FHA Options


April 20, 2023


FHA Mortgage

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

FHA Alternative

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!