Why are FHA Loans so Popular Right Now?

FHA LoansWith the current state of the economy, many home buyers are turning to FHA loans to help fund the home of their dreams.  There are several reasons home buyers are considering FHA loans over Conventional loans.  Two of the major reasons are flexible credit guidelines and lower down payments.  Currently, if your credit score is 580 or higher, your loan can be funded with just 3.5% down.  Likewise, if a borrower has a credit score of less than 580, their loan can be funded with 10% down.  With that being said, I must mention that although these options are available for people with credit scores less than 620, they are few and far between.  The reality is…many banks are requiring at least a 620 credit score for FHA loan approval.

Other beneficial FHA loan features are as follows:

  • FHA loans allow for gift funds for your down payment and closing costs.
  • FHA loans allows for 6% in seller contributions.  However, there is a proposal on the table to reduce this to 3% in the summer of 2010.
  • FHA loans have lower mortgage insurance premiums.
  • FHA loans have no income caps.
  • FHA loans offer flexible debt-to-income ratios.
  • FHA loans offer low competitive interest rates.
  • FHA loans allow for non-occupant co-borrowers to be added to the file.
  • FHA loans allow bond and grant program participation.

Overall, FHA loans offer a lot of benefits to you as a borrower.  Especially, if you had credit problems in the past and/or you have limited funds available for your down payment and closing costs.  As of today, the current FHA loan limit for Greater Atlanta is $346,250.  So, don’t hesitate to consider FHA as an option for your dream home purchase.

3 Responses to “Why are FHA Loans so Popular Right Now?”

  1. I found your blog filled with great info.

    Comment by Lamont Pujol on May 16, 2010 at 12:00 AM

  2. Thank you Lamont!

    Comment by Dominique Fletcher on May 16, 2010 at 3:32 PM

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    Comment by Gisele Wright on July 26, 2010 at 8:27 PM

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