3 Reasons Why First-Time Home Buyers Love FHA
Borrowers don’t have to be first-time buyers to participate in FHA’s mortgage program; however, it offers a number of features that are popular with consumers purchasing a home for the first time.
LOW DOWN PAYMENTS
Consumers can borrow up to 96.5% of the purchase price (or appraised value) of a home. This lowers the ammount of money that must be saved towards a down payment.
GIFT FUNDS* ARE ALLOWED FOR DOWN PAYMENT & CLOSING COSTS
Relatives, employers, unions, charitable organizations, government agencies, and even friends who have a clearly documented interest in the borrower can gift funds that the borrower can use for down payment and closing costs.
FLEXIBLE CREDIT REQUIREMENTS
Borrowers with limited or less than perfect credit histories benefit from FHA’s more flexible credit guidelines. Lower credit scores are accommodated with FHA, plus alternative credit sources can be considered by lenders when a borrower has limited credit experience.
THE BOTTOM LINE
FHA offers great features that support the needs of many first-time home buyers who have only recently started saving money and building their credit depth.
*Gifts cannot be given by an entity who has an interest in the sale of the property and no repayment of the gift is allowed. Certain limitations may apply to loan products for borrowers with a previous bankruptcy, foreclosure or short-sale and a higher interest rate and/or higher fees may be required.
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