FHA Loans

The Federal Housing Administration (FHA) was established in 1934 with the goal of improving the housing market and protecting lenders from borrower default. This is achieved by insuring loans offered by FHA-approved lenders across the country. Having insured over 34 million mortgages since its inception, the FHA has grown to become the largest insurer of mortgages in the world. Fairway Independent Mortgage Corporation offers exceptional rates and terms on FHA Loans throughout Georgia and Florida including Atlanta, Miami, and Orlando.

FHA loans can be used for the purchase of a new home, refinancing existing home loans, financing special renovation projects, and even reverse mortgages. First-time homebuyers in particular find FHA loans to be advantageous but many others will find they can benefit from FHA-insured loan programs as well. Those looking to refinance have access to both cash-out refinance and streamline refinance programs. Cash-out refinances are available to those in need of extra cash for expenses such as home repairs. Homeowners looking to simply lower their interest rates can take advantage of streamline refinancing.

The popularity of FHA loans among first-time homebuyers can be attributed to their relaxed credit requirements and low down payment options. With a down payment of 3.5% and a credit score as low as 580, a first-time homeowner could potentially qualify for an FHA loan. Family members are even able to gift the down payment if the applicant does not have the cash on hand.

FHA Loan Requirements

  • Credit Score – A credit score of 580 or higher is going to be required in most cases. Those with a credit score between 500 and 579 may still be able to qualify, but down payment requirements may be increased up to 10%.
  • Income Requirements – A debt-to-income ratio of 43 percent or less is needed. Debt-to-income ratios as high as 50 percent may be approved in special circumstances.
  • Down Payment – If credit score requirements are met, a down payment of 3.5% is the bare minimum. As noted above, borrowers who do not meet the minimum credit score requirements may need to provide a larger down payment.
  • Property Requirements – All properties must meet certain safety, security, and soundness (structural integrity) requirements set forth by the FHA.

The FHA requires each borrower to pay two separate mortgage insurance premiums (MIP) with an FHA loan. An up-front premium of 1.75 percent of the home’s purchase is automatically added to your loan balance by the FHA. The increase in your total loan amount as a result of the MIP addition does not affect the calculation of your loan-to-value (LTV) ratio. The second MIP due is an annual premium that will fall between .70 and 1.05%. Although this MIP is calculated annually, it is paid monthly. The annual MIP is based on factors such as the total loan amount, LTV ratio, and the length of the mortgage.

FHA Loan Limits by County.

County Single-Family Two-Family Three-Family Four-Family
Fulton $358,800 $459,300 $555,200 $690,000
Miami-Dade $345,000 $441,650 $533,850 $663,450
Orange $277,150 $354,800 $428,850 $532,950

At Fairway Independent Mortgage Corporation, we are committed to helping first-time homebuyers as well as current homeowners throughout Atlanta, Miami, and Orlando with all of their FHA loan needs. Contact us today with any questions you may have regarding Florida and Georgia FHA loans or to begin the pre-qualification process!