What is an FHA Loan?
The main goal of the Federal Housing Administration (FHA) is to improve the housing market and protect lenders in case a borrower was to default on their mortgage. The FHA has become one of the largest insurer of mortgages in the United States. Superior Mortgage Lending LLC is proud to offer great rates and flexible financing options on Las Vegas, Henderson, North Las Vegas and the whole state of Nevada. Ever wondered what exactly is a FHA loan? It’s a great loan program that makes home ownership possible for more people. If you’ve had trouble find a conventional loan that works for you, a FHA might be right for you.
What can a FHA Loan be used for?
A Las Vegas FHA Loan can be used for a number of different purposes including but not limited to: purchasing a new home, special renovation projects, refinancing an existing mortgage, and even reverse mortgages. Cash-out refinance options are available to buyers in need of capital for this such as debt consolidation and home repairs. Streamline refinance loans are also labile to reduce interest on current loans.
FHA Credit Requirements
FHA Loans offer relaxed credit requirements and lower down payment options making them easier to qualify for and very popular to those in the state of Nevada. To qualify for an FHA Loan in Las Vegas they need a down payment of 3.5 percent and a credit score of 580. If a borrowers does not having enough savings, family members can also gift the down payment. FHA Loans are a popular option to first time home buyers in Las Vegas, North Las Vegas, Henderson, and the whole state of Nevada.
Nevada FHA Loan Requirements
- Low Down Payment: The 3.5% down payment is generally less that for a similar conventional loan
- Less stringent qualifying standards: for example- FHA will allow reestablishment of credit within two years after a discharge of bankruptcy; when any judgments have been fully paid, any tax liens have been repaid, or a repayment plan has been established by the IRS, and within 3 years after a foreclosure has been resolved
- The property must be owner occupied: The FHA used to insure investors properties but they have virtually eliminated all such programs. Two-to-four unit properties qualify if they are owner occupied
- Appraisal: The lender is required to obtain an appraisal of the property from an FHA-approved appraiser. The appraiser will note any major health and safety deficiencies on the Uniform Residential Appraisal Report (URAR)
The Federal Housing Administration or FHA is a government agency that was created to make home ownership available to more people. The FHA loan has helped 34 million people to own a home, and it can help you attain the dream of home ownership. Even though a FHA loan isn’t just for first time homebuyers, this loan is perfect for anyone who has thought about owning a home at one point. The requirements are easier to qualify for then a conventional loan. The biggest advantage is that the down payment is usually much lower than a conventional loan.
| Average Home Price as of 2017 - Nevada Home Values have gone up 8.8% and it is predicted to rise 3.7% within the next year |
1% Down Payment Conventional Loan | 3.5% Down Payment FHA Loan |
| $269,999 | $2,700.00 | $9,450.00 |
Up-Front Premium
FHA charges an up-front premium of 1.75%-2.25% of the loan amount. In addition, FHA charges a monthly premium equal to .05% of the loan amount annually. If the property is sold within the first 84 months of the loan term, any unused portion of the up-front MIP will be returned to the borrower. When the loan balance drops below 78% of the original purchase price, the monthly payment may be cancelled, provided the borrower has made payments for five years on a thirty-year mortgage
Monthly Insurance Premium
FHA Mortgage Insurance premium is required for the loan regardless of the amount of the down payment. In contrast, conventional loans usually do not require mortgage insurance unless the loan-to-value ratio exceed 80%. All FHA loans require a mortgage insurance premium (MIP)
Working with an Experienced Lender
At Superior Mortgage Lending LLC, we are committed to helping our clients with all of the FHA Loan needs in Las Vegas, Henderson, North Las Vegas, and whole state of Nevada. If you are purchasing your first home, or want to refinance your current loan at a lower rate Superior Mortgage Lending LLC can help. Contact us today at 702-507-4170 with any questions you have on a FHA Loan and find out how to get qualified. FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.Typically the borrower can be approved with 3% Down vs 20% that is required on other loan programs.
Low Down payment – The down payment is often the biggest thing that has stopped someone from owning a home. With down payments of 20% on conventional loans being common, this can be very difficult for many people to come up with. According to the US Census Bureau the average price of a home in the US is $273,000, with a 20% down payment, someone would need $54,600. Most people don’t have that kind of money lying around. With a FHA loan the down payment is only 3.5%, or a $9,555 on a average priced home, which many more people can afford.
Lower Credit Requirements– Credit requirements for conventional loans these days can be pretty high. Not only that, but if your credit isn’t perfect you can end up paying more on a down payment. If your credit is less than perfect, FHA might be the loan for you. You may qualify for an FHA loan even though you have had financial problems. Even if you’ve had bankruptcies a FHA loan is not out of question as long as you can show that you’ve made consistent payments for the last 2 years.
There are of course limitations, not every home qualifies for a FHA loan. The FHA loan limit in Las Vegas and the surrounding area are currently $400,000.
