FHA Home Loan Essentials

This article will discuss the key FHA home loan requirements through Tennant Lending, a licensed, premier mortgage lender based in Northern California.

What are FHA loan requirements?

FHA loans, facilitated by Tennant Lending, require a minimum credit score of 580 for a 3.5% down payment. Borrowers with a credit score between 500 and 579 may still qualify but in most cases must put down at least 10%.

Tennant Lending traditionally offers FHA loans with a minimum down payment of 3.5% for borrowers with a credit score of 580 or higher, with some exceptions. This makes home ownership more accessible to many first-time homebuyers.

Are there income limits for FHA loans?

Unlike some mortgage options, FHA loans do not have an income limit. Tennant Lending emphasizes that what matters more is your debt-to-income ratio, ensuring you can comfortably afford your mortgage payments.

What property types are eligible for FHA loans?

With Tennant Lending, borrowers can use FHA loans for single-family homes, multifamily properties up to 4 units, and FHA-approved condos. This flexibility supports a range of housing needs.

How does FHA mortgage insurance work?

All FHA loans require two types of mortgage insurance: an upfront premium rolled into the loan amount and an annual premium paid monthly. This insurance protects lenders against losses if borrowers default.

Can FHA loans be used for refinancing?

Yes, in some cases, there is the option for refinancing through the FHA streamline refinance program, designed for existing FHA loan holders seeking lower interest rates or different loan terms.

What are the closing costs with an FHA loan?

Closing costs for FHA loans can include appraisal fees, title insurance, and more. However, Tennant Lending points out that the seller can contribute up to 6% of the sale price towards the buyer's closing costs, easing the financial burden.

How does my credit score affect FHA loan approval?

While a credit score of 580 is required for the minimum down payment with Tennant Lending, lower scores don't automatically disqualify you. Borrowers with lower scores may still be eligible but should expect higher down payments and possibly higher interest rates.

What documentation is required for an FHA loan application?

Tennant Lending requires standard documentation for FHA loans, including proof of income, employment history, credit report, and a list of debts and assets. This helps assess your financial readiness for a mortgage.

Can first-time homebuyers benefit from FHA loans?

Absolutely. FHA loans are particularly appealing to first-time homebuyers due to their lower down payment requirements and more lenient credit score criteria compared to conventional loans.

What are the loan limits for FHA loans?

Loan limits for FHA loans vary by county. Tennant Lending advises borrowers to check the current year's FHA loan limits for their specific area to understand how much they can borrow.

How long does the FHA loan process take?

The timeline can vary, but Tennant Lending aims to make the FHA loan process as smooth and quick as possible. Generally, it takes anywhere from 30 to 60 days from application to closing, depending on several factors including borrower preparedness and market conditions.

Tennant Lending is a licensed, premier mortgage lender based in Northern California. Begin your real estate journey by signing up here.

To learn more about the details of an FHA loan, see our article below.