California FHA Loans
One of the most common Home Loans used in California to purchase a Single Family Home or Condo is the FHA Loan. FHA Loans require a minimal 3.5% down payment, and allow more flexible Underwriting for Debt Ratios, Minimum Fico Scores, and Gift Funds when compared to conventional loans.
California FHA Loans are made by Private Mortgage Lenders. FHA Loans are then insured by the Federal Housing Administration, a Federal Agency that is a department within HUD, the U.S. Department of Housing and Urban Development. The FHA does not loan money direct to California Home Buyers. It provides lenders with default protection through mortgage insurance (MIP) in the event the borrower defaults on his or her loan obligation.
FHA Loans are available to nearly all buyers in California. FHA Loans do not have a maximum income limit, and are available to First Time Home Buyers as well as Second Time Home Purchasers. FHA loan guidelines allow many creditworthy families to purchase homes or refinance home who otherwise do not meet requirements for conventional loans. Conventional loans typically require higher fico scores, lower debt ratios, and a longer waiting period after Bankruptcy, Foreclosure, or Short Sale. In most cases, FHA Loans require as little as 3 yrs waiting after a foreclosure, and just 24 months for Bankruptcy 7 or 11 discharge, and can even be closed while in a Chapter 13 Bankruptcy after 12 payments on the BK schedule. Call to see how soon you can become a homeowner again.
California FHA loans require just 3.5% down payment on a home purchase, which can be from the borrowers own funds or a gift from qualified sources.
California FHA Refinances require just 2.25% equity in your home, and can consolidate a first and second mortgage into one low 30 yr fixed rate.
FHA Loan rates on competitive vs conventional loan rates, even with lower down payment requirements than conventional loans.
Some other benefits of FHA financing:
- Just a 3.5 percent down payment is required.
- All Down Payment and Closing cost monies can be Gifted
- FHA Loans available in California up to $970,800 for 2022 in certain high cost counties
- Affordable monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
- More flexible underwriting criteria than conventional loans
- More forgiving underwriting criteria for Credit Scores, Bankruptcy (2 yrs), Short Sale(0-3 yrs), and Foreclosure (3 yrs)
- Loans are assumable to qualified buyers.
- Can be used to purchase 2-4 unit homes (must occupy one unit yourself)
- Down Payment Assistance is available on FHA loans up to $647,200 for Single Family Homes, Condos, Townhomes and Manufactured Homes on Owned Land
- Down Payment Assistance is available on FHA loans up to $828,700 for Duplex purchase
- FHA Loans allow you to consolidate a first and second mortgage without classifying the loan as Cash out – a limiting factor in Conventional Loans
866-900-2342 (toll free).
For information on VA Loans, please visit our VA Loan information page.