How To Qualify For FHA Loan in Boyes Hot Springs California (Sonoma County)

How To Qualify For FHA Loan in Boyes Hot Springs California (Sonoma County)

Looking for an FHA Loan in Boyes Hot Springs California?

FHA loans have been a flexible mortgage program that’s been around since the 1930’s and is protected by the Federal Housing Administration (FHA). They are popular especially among first time home buyers because they allow down payments of 3.5% for credit scores of 580+.

How Does an FHA Loan Work?

Borrowers can qualify for an FHA loan with a down payment as little as 3.5% for a credit score of 580 or higher. The borrower’s FICO score can be between 500 – 579 if a 10% down payment is made. It’s significant to remember though, that the lower the credit rating, the higher the interest borrowers will receive. Something also worth noting is that the FHA loan limits affect your FHA mortgage insurance – its just part of the FHA loan qualifications.

The FHA program was created in response to the increase of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with sufficient insurance; and to help stimulate the housing market by making home loans much more accessible and attainable for people with less than perfect credit or a low down payment due to FHA mortgage limits in Boyes Hot Springs, California. Essentially, 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.

Because of that insurance, lenders can, and do, offer FHA home loans at beneficial mortgage loan interest rates and with less stringent and more flexible qualification requirements. The FHA is an agency within the U.S. Department of Housing and Urban Development.


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Benefits of FHA Loans: Low Down Payments and Less Strict Credit Score Requirements

FHA Loan in Boyes Hot Springs

Typically an FHA loan in Boyes Hot Springs is one of the easiest types of mortgage loans to get approved for because it requires a low down payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for maximum financing. Borrowers with credit scores as low as 500 can qualify for an FHA mortgage.

Consumers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get qualified for private mortgage insurance should look into whether an FHA loan is the popular option for their personal scenario.

Another advantage of an FHA home loan is that it’s an assumable mortgage which means if you want to sell your property, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.

FHA Allows a 3.5% Down-Payment

For today’s home buyers, there are only a few mortgage options which allow for down-payments of five percent or less for residents of Sonoma County. The FHA is one of them.

With an FHA mortgage, you can make a down-payment as small as 3.5%. This benefits home buyers who don’t have a lot of money saved up for down-payment; and, home buyers who would rather save money for moving costs, emergency funds, or other needs.

FHA Allows 100% Gift Funds

The FHA is vigorous with respect to gifts for down-payment. Very few mortgage loan programs will make it possible for your entire down-payment for a home to come from a gift. The FHA will.

Via the FHA, your entire 3.5% down-payment can be a gift from parents or another family member, an employer, an approved charitable group, or a government home-buyer program. If you’re using a down-payment gift, though, you’ll need to follow the process.

The FHA Hybrid provides for an initial fixed interest rate for a period of three or five years, and then changes annually after the initial fixed time frame. The 3/1 and 5/1 FHA Hybrid products permit up to a 1% annual interest rate adjustment after the initial fixed interest rate period, and a 5% interest rate cap over the life of the loan. The new payment after an adjustment will be calculated on the current principal balance at the time of the modification. This insures that the payment adjustment will be very little even on a worst case rate change.

About Boyes Hot Springs California

The area was first occupied by Indigenous peoples, who discovered and used the hot springs that the area is named after. Under Mexican rule, in July 1840, Lazaro Piña was deeded 50,000 acres as Rancho Agua Caliente. Sometime in 1849 Thaddeus M. Leavenworth acquired 320 acres of the Rancho in what became present-day Agua Caliente, Fetters Hot Springs, Boyes Hot Springs, and part of Maxwell Farm. In 1889, property was being sold in the area as being near the “celebrated old Indian Medicine Spring.” Henry Ernest Boyes discovered hot springs in 1895 in the central part of the area. He and his wife called the area Agua Rica. and started the Boyes Hot Springs Hotel, now the site of the Fairmont Sonoma Mission Inn & Spa. The area became popular with tourists, with over 70,000 visiting each year. A railroad serviced the area during this period.

A wildfire in September 1923 destroyed the settlement.

During the Great Depression, the area’s tourism business stopped and the hotel closed. During that period, the Oakland Oaks and San Francisco Seals did their spring training in Boyes Hot Springs. Tourism became the region’s main economic focus again later in the 1930s, then during World War II it was taken over by the United States Navy, who sent sailors to the area for recreation. Railroad service stopped in 1942.

Today, the area is primarily residential with a large Latino population. Boyes Hot Springs is part of an area called “The Springs”, which also includes Fetters Hot Springs and Agua Caliente.

According to the United States Census Bureau, the CDP has a total area of 1.1 square miles (2.8 km), all of it land. Boyes Hot Springs is known for, and named after, the hot springs that run 1,100 feet below the surface. Today, the springs are accessible through the Fairmont Hotel and Spa located in the area. The springs run at 135 degrees.

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Who Are FHA Loans For?

FHA loans are offered to low-income individuals who have credit scores as low as 500. Individuals with a credit score between 500-579 can obtain an FHA loan with a down payment of 10%; individuals with a credit score higher than 580 can get an FHA loan with as little as 3.5% down. The Federal Housing Administration does not lend the borrower the money to take on a mortgage or to buy the property. Rather, the borrower pays a monthly or yearly mortgage insurance premium to the FHA to insure the loan which the lending institution issues to him or her. In case of default, the lender’s financial risk is minimized since the FHA would step in to cover the payments.

Having no credit history is not a problem with an FHA loan for Sonoma County. Instead of your credit report, the lender may look at other payment-history records, such as utility and rent payments.

Even people who have gone through bankruptcy and foreclosure may still qualify for an FHA loan. However, the lower the credit score and the lower the down payment, the higher the interest rate.


(Or call 213-474-7389 to ask a local lender anything!)

Kinds Of FHA Mortgage Loans

In addition to its popular FHA loan, the FHA also guarantees other loan programs provided by private lending institutions. Here’s a look at each of them.

  • FHA 203( k) loans – These FHA loans assist homebuyers acquire a home– and refurbish it– all with a single mortgage. Property owners can also use the program to refinance their current home loan and add the cost of remodeling tasks into the new loan. FHA 203( k) loans can be found in 2 types:
    • The limited 203( k) has an easier application procedure, and the repair work or enhancements must amount to $35,000 or less.
    • The basic 203( k) requires extra documentation and applies to improvements costing more than $5,000, however the total value of the property must still fall within the FHA home mortgage limitation for the area.
  • Home Equity Conversion Mortgage, or HECM – A HECM is a popular type of reverse mortgage and is likewise insured by the FHA. A HECM enables older property owners (aged 62 and up) with significant equity or those who own their houses outright to withdraw a portion of their home’s equity. The amount that will be readily available for withdrawal differs by debtor and depends on the age of the youngest borrower or qualified non-borrowing partner, current interest rates and the lower of the house’s assessed worth or the HECM FHA home mortgage limit or sales price.
  • FHA Energy Efficient Mortgage (EEM) program – Energy effective home loans backed by the FHA allow homebuyers to buy homes that are currently energy effective, such as EnergyStar-certified structures. Or they can be utilized to purchase and renovate older houses with energy-efficient, or “green,” updates and roll the expenses of the upgrades into the loan without a bigger deposit.
  • FHA Section 245( a) loan – Also known as the Graduated Payment Mortgage, this program is tailored at debtors whose earnings will increase gradually. You start with smaller regular monthly payments that slowly increase. 5 specific strategies are offered: 3 strategies that permit 5 years of increasing payments at 2.5 percent, 5 percent and 7.5 percent each year. Two other plans set payment boosts over 10 years at 2 percent and 3 percent yearly.

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FHA Loan Limits for 2022

For 2019, the flooring limitation for FHA loans in the majority of the country is $314,827, up from $294,515 in 2018. For high-cost areas, the ceiling is $726,525, up from $679,650 a year back. These limits are referred to as “ceilings” and “floors” that FHA will guarantee. FHA updates limit amounts each year in action to changing home costs.

FHA is needed by law to change its amounts based on the loan limits set by the Federal Housing Finance Agency, or FHFA, for standard home loans ensured or owned by Fannie Mae and Freddie Mac. Ceiling and flooring limitations differ according to the expense of living in a certain area, and can be different from one county to the next. Locations with a higher cost of living will have greater limits, and vice versa. Special exceptions are produced real estate in Alaska, Hawaii, Guam and the Virgin Islands, where house building and construction is more expensive.

FHA Loan Relief

Loan servicers can use some flexibility on FHA loan requirements to those who have actually suffered a major monetary challenge or are struggling to make their payments.

That relief might be in the form of a momentary duration of forbearance, a loan adjustment that would decrease the rate of interest, extend the repayment period, or defer part of the loan balance at no interest.

The FHA Hybrid Adjustable Rate

FHA administers a number of programs, based on Section 203(b), that have special features. One of these programs, Section 251, insures adjustable rate mortgages (ARMs) which, particularly during periods when interest rates are low, enable borrowers to obtain mortgage financing that is more affordable by virtue of its lower initial interest rate. This interest rate is adjusted annually, based on market indices approved by FHA, and thus may increase or decrease over the term of the loan. In 2006 FHA received approval to allow hybrid ARMs, in which the interest is fixed for the first 3 or 5 years, and is then adjusted annually according to market conditions and indices.

How do you Qualify for an FHA Loan in Boyes Hot Springs CA?

The FHA makes it relatively easy to qualify for a loan. Again, the government guarantees the loan, so mortgage companies are more willing to approve loans. However, lenders can (and do) set standards that can be stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Boyes Hot Springs CA, you might have better luck with another.

Note: you never know until you submit an app. Even if you think you won’t qualify after reading this page, talk with an FHA approved lender in Boyes Hot Springs to find out for sure.

Income limits: there are none. You’ll need enough to show that you can repay the mortgage loan but these loans are geared towards lower income borrowers. If you’re fortunate enough to have a high income, you aren’t disqualified like you might be with certain first-time home buyer programs.

FHA Closing Costs

While FHA defines which closing costs are allowable as charges to the borrower, the specific costs and amounts that are deemed reasonable and customary are determined by each local FHA office.

FHA Debt Ratios

In order to prevent home-buyers from getting into a home they cannot afford, FHA qualifications have been set in place requiring borrowers and/or their spouse to qualify according to set debt to income ratios.

FHA Credit Issues

An FHA loan applicant’s past credit performance that proves good credit history and a solid track record of timely payments will likely be eligible for the mortgage.

How to Find FHA Lenders

Customers get their home loans from FHA-approved lending institutions in Boyes Hot Springs rather than the FHA itself, which just insures the loans. FHA-approved loan providers can have different rates and costs, even for the exact same loan.

FHA loans are available through many sources– from the greatest banks and cooperative credit union to community banks and independent home loan lending institutions. Expenses, services and underwriting requirements vary among lenders or home mortgage brokers, so it’s essential to shop around.

Learn more about how to find low FHA home mortgage lending institution.


(Or call 213-474-7389 to ask a local lender anything!)