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Five Facts You Need To Know About FHA Loans In 2021

January 04, 2021

Are you interested in buying or building a home in the new year? Be informed about several issues that may apply to you when building or buying a new home. With a little information you can become better prepared to explore your FHA home loan options in 2021

5. FHA Loan Limits Are Higher in 2021

FHA loan limits go up again for the majority of housing markets in the USA again in 2021; higher loan limits may make the difference for some trying to decide where to purchase or build as well as for what kind of property to buy. Don’t forget that FHA loan limits are higher for multi-unit properties.

Those interested in building a home using an FHA One-Time Close construction mortgage should ask their lenders how higher loan limits might affect your choices when deciding on plans, materials, etc.

4. FHA Home Loans Are Not Need-Based Loans

Unlike certain USDA home loans to buy or build, FHA mortgages feature no need-based restriction on FHA loans such as household income caps or other restrictions. FHA mortgages are for any financially qualified borrower and are not intended for a certain segment of the population, a certain income range, and FHA loans are not for first-time buyers only.

3. FHA Mortgages For Condo Units, Mobile Homes, And Multi-Unit Properties

Yes, you can purchase condo units, mobile homes and even multi-unit homes with an FHA mortgage with the same low downpayment terms and guidelines as for existing construction suburban homes.

When it comes to purchasing a multi-unit property remember that with FHA loans you are permitted to rent out the unused living units in the home for 30 days or more but remember that FHA loan rules do not permit FHA mortgages for Air BnB operations or other short-term occupancy types.

2. FHA Loan Credit Terms

Lender standards will apply, but FHA loan program minimums start at 580 and higher FICO scores for maximum financing of 3.5% down. Borrowers who want to explore their FHA loan One-Time Close construction loan options should expect to be held to a higher credit score stanard, but these will be lender requirements and not variations in FHA loan minimums.

1. Down Payment Assistance Is Permitted

FHA home loans for purchase permit down payment assistance programs that meet FHA standards; you will quickly learn that the FHA as an agency does not offer such assistance and you will need to see a local agency, but down payment help can be a major boost for some borrowers.

Keep in mind that for One-Time Close loans, you may find your lender does not permit down payment assistance, but this is NOT an FHA guideline but a lender rule.

 

Five Facts You Need To Know About FHA Loans In 2021 - FHA News and Views (fhanewsblog.com)


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