An FHA loan is a government-insured mortgage was typically designed to help homebuyers with lower income and lower credit scores. Borrowers looking into this program can be approved with the minimum down payment of 3.5%. If a borrower is looking to finance their home with a smaller down payment and a more lenient approval process, an FHA loan would be the route to go.
What is a FHA Loan?
FHA loans are mortgages that are insured by the Federal Housing Administration and financed by FHA-approved lenders. FHA loans are predominantly popular amongst first time homebuyers looking to purchase a primary residence. FHA loans tend to be more lenient towards borrowers whom have lower credit scores, low to moderate income, and to whom do not have much for down payment.
So, what does it mean to be insured by the Federal Housing Administration? This means that borrowers whom are looking to get an FHA loan are required to pay an Upfront Mortgage Insurance Premium and a Monthly Mortgage Insurance that helps protect the lender in case a borrower defaults on their mortgage.
Benefits of FHA Loans
- Lenient approval process
- Can qualify with lower credit profile
- 3.5% down payment of the purchase price
- You may qualify even if you had previous financial difficulties, such as a bankruptcy
- Lower mortgage rates
- Adjustable-rate and fixed-rate loan terms available
FHA Loan Eligibility
- 580 FICO score required for a minimum down payment of 3.5%
- Steady employment history of at least 2 years
- Home must be for primary residence
- Non-occupant co-borrowers allowed
FHA Loan Limits
Different counties have different limits on how much you can borrow for an FHA Loan.
Get Pre-Approved for a FHA Loan
If you are a first time home buyer, or simply seeking a lower down payment in Chicago, including suburbs such as Plainfield IL, Naperville, Schaumburg IL, or anywhere in the entire state of Illinois, contact Zachary Kraus Mortgage Lending Team at Success Mortgage Partners, Inc at (630) 230-8602 for more information, or fill out the form on this page.