FHA Loans

HandsFHA 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 3.5% down vs 20% that is required on other loan programs. Guild Mortgage - Tim Kemper offers FHA Loans in Chico, Walnut Creek, Paradise CA, Yuba City, Sacramento, and the entire state of California.

What is a FHA Loan?

Established in 1934, the Federal Housing Administration (FHA) was created with the mission of improving the housing market by protecting lenders. It has insured over 34 million mortgages in the United States, meaning it has insured more mortgages than any other organization in the world. Because FHA Loans are insured by the federal government and FHA, lenders are able to offer home loans with more flexible qualification criteria, competitive interest rates, and lower down payments. For FHA Mortgages, many borrowers can be approved with a down payment of just 3.5%, compared to the typical 20% for other loan programs. This down payment can also be gifted by an acceptable donor.

Benefits of FHA Loans

FHA Loans have many benefits, including the lower down payment. FHA Loans can be used for buying a new home, financing a special renovation project, refinancing your current mortgage, and even reverse mortgages for homeowners over 62 years old. Some of the advantages of FHA Home Loans are:

  • Lower Down Payments
  • Higher Debt to Income Ratios
  • Borrowers can receive earnest money back
  • Lower Credit Score Requirements
  • Shorter Seasoning Periods
  • Home Loan is assumable
  • Non-occupant co-signers can help with down payments

FHA Loan Eligibility

Thanks to the federal government insuring FHA Loans, there are more flexible eligibility requirements.

  • Credit scores of 580 or higher. You may qualify with 500 and 579 credit scores, but you will have additional requirements, including higher down payments.
  • Debt to income ratios of up to 43%. You may qualify with debt ratios as high as 50% in special circumstances, but you will have additional requirements.
  • The property you are purchasing must meet specific criteria required by the FHA

FHA Loan Limits

Different counties in California have different limits on how much you can borrow for a FHA Loan. Here are new FHA limits for 2019 for some of the counties in Northern California.

County Single Family Two Family Three Family Four Family
Butte County $314,827 $403,125 $487,240 $605,525
Nevada County $486,450 $622,750 $752,750 $935,500
Plumas County $336,950 $431,350 $521,400 $648,000
Sierra County $314,827 $403,125 $487,250 $605,525
Solano County $494,500 $633,050 $765,200 $950,950
Yuba County $324,300 $415,150 $501,800 $623,650

If you would like to learn the loan limits in other counties, visit the HUD website or contact Guild Mortgage - Tim Kemper at 530-377-5394 today!

Get Pre-Approved for a FHA Loan

If you are a first time home buyer, or simply seeking a lower down payment in Chico, Walnut Creek, Paradise CA, Yuba City, Sacramento, or anywhere in California, contact Tim Kemper at Guild Mortgage - Tim Kemper at 530-377-5394 for more information, simply fill out the form on this page.