FHA is the Federal Housing Administration established in 1934 for the purpose of increasing home ownership. Without FHA, qualifing for a loan without a 20% down payment would be difficult. FHA provides insurance to the lender that is lending money for the purchase of a home. These cost are recovered through the upfront and monthly fee associated with the loan.
FHA does not have a minimum credit score, however the lender can require a minimum credit score based on their policies. Just because a lender at "Bank A" won't lend to a 602 credit score, doesn't mean the "Bank B" won't lend. These banking policies which go beyond FHA code are called "overlays". It is important to realize that each bank has different overlays and that you may get approved at one bank and disqualify at another.
Remember, the bank that disqualifies is unlikely to tell you that you can get a loan somewhere else, rather they will try to make you wait until you fit their overlays.
When deciding among Utah FHA lenders, it is important to realize that the FHA code is quite extensive and understanding different bank's overlays can be overwhelming. A smart suggestion is to use a loan officer with at least 10 to 15 years of experience in FHA. If they are closing less than 10 FHA loans a month, you may want to search for someone more well-versed in the field.
The standard down payment for FHA is 3.5%. These funds can only come from your personal assets, gift from a family member, or a city or county grant. Credit score, work history and Debt-to-Income Ratio are are strongly considered with approving a FHA loan.
To get a detailed analysis and pre-approval for FHA, please fill out the contact information below.
If you are worried about being denied or need credit repair, Don't worry.