What are Box Home Loans requirements to qualify for an FHA loan?

• A borrower must have liquid assets in reserve that are equal to the amount of two months mortgage payments. (this is in addition to any down payment or closing costs)
• A borrower must have a credit score 700 or higher to qualify for loans requiring a 3.5% down payment.
• The mortgage amount may not exceed the maximum amount for the area in which the home is located. So, the amounts vary by location and are pre-determined by Fannie Mae. A calculator can be found on the HUD website to determine the max amount for your area at https://entp.hud.gov/idapp/html/hicostlook.cfm

What are the benefits of an FHA loan?  

• It is easier to qualify because FHA insures the loan (Loans are insured by the Federal Housing Administration)
• They are more lenient on debt to income ratios and loan to value limits
• It is a fixed rate for the course of the loan
• There are minimal loan charges, but they will depend on your Lender
• The seller is allowed to paying up to 3% of the sales price towards the buyers closing costs and prepaid items
• FHA loans are fully assumable
• FHA will not approve a mortgage until serious defects in the home are repaired (roof leaks, mold, structural damage, removal of lead-based paint, etc.)

What are the cons of an FHA loan?

• If you’re buying a condo, the development must first apply to HUD and be granted FHA approval before anyone can purchase or refinance a FHA loan (This is only a con if the condo you want to purchase has not taken this step.)
• The maximum loan amount in your area may be too low for the desired loan amount
• Cannot be used for an investment property