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Federal Housing Administration mortgage loans can be an attractive option in helping your borrowers achieve the dream of homeownership. Explore the features and benefits that make this loan product so appealing.
FHA loans are insured through the U.S. Department of Housing and Urban Development, which offers a competitive rate and advantages that are unavailable with other mortgage products. Below we have provided an overview of additional benefits:
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Low down payment requirement. Borrowers need just 3.5% as down payment on the purchase of a one- to four-unit primary residence.
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Relaxed waiting periods for derogatory credit. This loan type is most lenient on the waiting periods for bankruptcy, pre-foreclosure, foreclosure and short sale. This can be beneficial to a borrower that is working hard to repair past credit issues.
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Competitive interest rates. You may be able to offer your borrowers a lower interest rate with an FHA loan than you would with a conventional loan. And there are no loan level price adjustments.
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More affordable mortgage insurance. The premium required on an FHA loan is not risk-based and is often more affordable than private mortgage insurance that may be required with a conventional loan.
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Down payment assistance eligibility. Iowa Finance Authority down payment assistance options can be paired with FHA loans to assist with down payment and closing costs requirements.
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Expanded qualifying attributes. FHA often has a higher debt-to-income limit than conventional and will also allow a non-occupying co-borrower or co-signor to make qualifying easier.
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