Many potential property owners in Burlington are not aware of the benefits of using the FHA (Federal Housing Administration) mortgage program for their loan.
Federally Insured Mortgages offer lower down payments than conventional mortgages. FHA mortgages also offer flexibility in qualifiying requirements and seller assistance.
Benefits of FHA Financing:
- Available on 1-4 unit and FHA approved condominiums.
- Down payment requirements as little as 3.5%.
- Down payment does not have to be borrower’s own funds. The full 3.5% down payment requirement can be 100% gift funds from family member, borrower’s employer and even a close friend.
- Any closing costs including origination fee, discount points, Up Front Mortgage Insurance, Buydown costs and prepaid items can be paid by the seller up to 6% of the purchase price.
- Private Secondary financing is permitted by charitable organization, government agencies and family members.
- Less restrictive credit guidelines allowing credit scores as low as 640.
- No reserve requirements on 1 and 2 family properties. Three months reserves are required on 3 and 4 family properties from borrower’s own funds.
- When purchasing a 2-4 unit property, 85% of rental income can be added to the qualify.
- Non-owner occupants are allowed on single family homes and condominium purchases (ie. Parents cosigning).
As you can probably tell, FHA loans are ideal for those borrowers who may have limited down payment resources, and/or an acceptable, but less than perfect credit score, or limited credit history.
FHA loans do require some specific appraisal and inspection requirements which you can review in this document: FHA Info That You Should Know
If you are wondering if an FHA loan is right for you, or if you are a real estate professional who may need more details on the FHA programs for your Burlington Vermont area real estate clients, please give us a call at 802-658-5599 x3111.