The Federal Housing Administration (FHA) offers a variety of loan products to meet a wide range of borrower needs. This includes programs for purchasing new homes, refinancing current mortgages, financing special renovation projects, and even reverse mortgages. The FHA was established in 1934 to improve the housing market and protect approved lenders from borrower default which is achieved by insuring the loans offered by these lenders. Having insured over 34 million mortgages since its inception, the FHA has become the largest insurer of mortgages in the world. Hunter Creek Mortgage, Inc. offers exceptional rates and terms on FHA loans throughout Boise, Meridian, and Caldwell.
Relaxed credit requirements and low down payment options make first-time homebuyers prime candidates for FHA loans. First-time homebuyers could potentially qualify for an FHA loan with credit scores as low as 580 and the minimum down payment requirement of only 3.5%. Family members can even offer the down payment as a gift if the applicant does not have the cash on hand.
Homeowners who currently have an FHA loan will find there are great FHA refinance programs available as well. Both cash-out refinance and streamline refinance programs are available depending on a particular borrower’s needs. Buyers interested in financing a rehabilitation project can take advantage of an FHA 203k loan to combine the purchase of a home and the cost of repairs in a single home loan.No matter what your financing needs are, there are a few requirements that must be met for all FHA loans.Idaho FHA Loan Requirements
- Credit Score – Applicants will need to have a minimum credit score of at least 580. Those with scores between 500 and 579 may still be able to qualify, but higher down payments or interest rates may be assessed.
- Debt-to-Income Requirements – A debt-to-income (DTI) ratio of 43% or less is required. In special cases, a DTI ratio of up to 50% can be approved.
- Down Payment – 3.5% is the minimum down payment requirement. Borrowers may be asked to make a larger down payment if credit score and DTI requirements are not satisfied.
- Property Requirements – All properties must meet certain safety, security, and soundness (structural integrity) requirements.
Mortgage insurance is the component of FHA loans that allow lenders to offer mortgages with such low down payments, rates, and credit scores. This insurance protects lenders from borrowers defaulting on their mortgages. Two mortgage insurance premiums (MIP) are due with every FHA loan. An up-front premium of 1.75% of the purchase price is added to your mortgage automatically by the FHA. The second premium is paid as part of your monthly mortgage payment. This premium is calculated at .70% to 1.05% of your annual mortgage balance and will be based on factors including the total loan amount, your LTV ratio, and the length of your mortgage.
The FHA sets maximum loan limits by county which can range from $271,000 up to $636,500 in high-cost areas.
Idaho FHA Loan Limits
At Hunter Creek Mortgage, Inc., we are committed to helping first-time homebuyers and current homeowners throughout Boise, Meridian, and Caldwell with all of their FHA purchase and refinancing needs. Contact us today with any questions you may have regarding Idaho FHA loans or to begin the pre-qualification process!