The FHA Loan Purchase
What are FHA purchase loans?
FHA purchase loans are mortgages insured by the Federal Housing Administration, a division of HUD. The loan must be secured by a primary residence that meets HUD property condition standards and is subject to county specific limits.
Benefits of a FHA Purchase Loan
- Low Down Payment
Just 3.5 % down for borrowers with a 580+ FICO.
- Flexible Credit Guidelines
FHA Loans have less restrictive credit requirements than conventional loan programs.
- Assumability
A future buyer can assume the loan—often at yesterday’s lower rate—giving sellers a marketing edge.
- Down Payment Assistance Friendly
Most state and local DPA grants and forgivable seconds are designed to layer with FHA financing.
- Upfront Mortgage Insurance (UFMIP)
May be financed or paid in cash.
- Seller Contributions
The FHA permits sellers to contribute up to 6 % of the home’s purchase price toward the borrower’s closing costs and prepaid expenses.
Frequent Questions Regarding Conventional Purchases
Can my entire 3.5 % down payment be a gift?
Yes. For 1‑unit primary residences, 100 % of the down payment and even closing costs may come from a relative, fiancé, or approved charitable organization—provided the donor signs a gift letter and funds are properly documented.How soon after bankruptcy or foreclosure can I get an FHA loan?
Chapter 7: two years after discharge (with re‑established credit). Chapter 13: after 12 on‑time plan payments and court approval. Foreclosure: three years from the deed‑transfer date. Extenuating circumstances can shorten the wait.When and how can I remove FHA mortgage insurance?
If you started with <10 % down, annual mip stays for the life of loan. with ≥10 % down it ends after 11 years. many borrowers drop by refinancing into a conventional loan once equity reaches 20%.Are student‑loan payments counted differently?
Yes. FHA uses the greater of the actual payment or 0.5 % of the outstanding loan balance (down from 1 %), making qualification easier for borrowers on income‑driven repayment plans.Let's Talk FHA Purchase Loans
Find Out More
Interested in an FHA purchase loan? Submit your information.