Federal Housing Administration (FHA) home loans
Advantages of FHA loans:
- Up to 96.5 percent financing on some loans; 100 percent of a down payment can come in the form of a gift from a family member or employer
- Seller can contribute up to 6 percent of a sales price to help with closing costs and prepaid items for a homebuyer
- May be a viable option for borrowers with limited equity or money available for a down payment
- Option to choose a fixed-rate or an adjustable-rate mortgage (ARM) that adjusts annually after 5 or 7 years and offers protection from large interest rate increases at any one time
- 203k renovation rehab construction programs. Purchase or Refinance a home in need of repair or renovation.
What you’ll need to consider:
- You can finance your mortgage insurance
- Typically you will pay mortgage insurance for the entire term of the loan.
- FHA home loans have a $765,600 maximum loan amount (in designated areas)
- The interest rate on Adjustable Rate Mortgages (ARMs) may increase after the initial fixed-rate period.