The FHA, or Federal Housing Administration, was created to provide mortgage insurance on loans made by FHA-approved lenders. FHA loan requirements were set to ensure that both single family and multi-family homes in the United States and its territories could be insured. The FHA is the largest insurer of residential mortgages across the globe and has insured tens of millions of properties since its establishment in 1934.
Mortgage Insurance
Click here to get more information about the requirements. FHA loan requirements in Kalamazoo, MI state that insured loans require mortgage insurance. This insurance will protect lenders against losses that can result from defaults on home mortgages.
FICO Score
If you are interested in an FHA loan, FHA loan requirements state that you need a minimum FICO score of 580 in order to qualify. This qualification earns you the low down payment advantage, which is currently at about 3.5-percent. If your score is below 580, be sure to contact a Kalamazoo loan company, as you may not be entirely excluded from eligibility. If you know for a fact that you have a score between 500 and 579, you need to ensure that you can afford a down payment of at least 10-percent, as it is required for lower FICO scores.
Why Get This Loan?
FHA loans are offered at attractive interest rates and with more flexible qualification requirements. FHA insurance allows insured vendors to offer this lower rate because they are at a lower risk for loss due to a default.
If you have a FICO score above 580, you are required to make a down payment of only 3.5-percent of the purchase price of the home. For this reason, millions of people get these loans each year. No matter your reason to pursue such a loan, you are likely eligible. Be sure to research your options to find the best one for your unique needs, but an FHA loan is usually the best choice.
