How To Qualify For FHA Loan in Hodge California (San Bernardino County)
Looking for an FHA Loan in Hodge 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 credit rating can be between 500 – 579 if a 10% down payment is made. It’s crucial to remember though, that the lower the credit worthiness, the higher the interest borrowers will pay. Something also worth noting is that the FHA loan limits affect your FHA mortgage insurance – its just part of the FHA loan requirements.
The FHA program was created in response to the increase of foreclosures and defaults that happened in 1930s; to provide mortgage companies with adequate insurance; and to help spark the housing market by making home loans much more accessible and affordable for home-buyers with not so great credit or a low down payment due to FHA mortgage limits in Hodge, 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, mortgage companies can, and do, offer FHA mortgages at really attractive mortgage 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.
(Or call 213-474-7389 to ask a local lender anything!)
Benefits of FHA Loans: Low Down Payments and Less Strict Credit Score Requirements
Typically an FHA loan in Hodge is one of the easiest types of mortgage loans to qualify 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 loan.
Borrowers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get approved for private mortgage insurance should look into whether an FHA loan is the popular option for their personal circumstances.
Another advantage of an FHA home loan is that it’s an assumable home loan which means if you want to sell your home, 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 San Bernardino 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 loan programs will permit 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 procedure.
The FHA Hybrid provides for an initial fixed interest rate for a period of three or five years, and then readjusts annually after the initial fixed period. The 3/1 and 5/1 FHA Hybrid products make it possible for 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 adjustment. This insures that the payment adjustment will be minimal even on a worst case rate change.
About Hodge California
Hodge is an unincorporated community in the Mojave Desert, within San Bernardino County, California, United States.
Hodge is located along historic U.S. Route 66 and the Mojave River, 11 miles (18 km) southwest of Barstow and north of the Victor Valley.
The settlement was named after ranch owners Gilbert and Robert Hodge. Hodge was a railroad station, supplying water from wells into the usually subterranean Mojave River. It was a desert stop on U.S. Route 66 between Barstow and Victorville.
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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 house. Rather, the borrower pays a monthly or annual 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 San Bernardino 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 likewise guarantees other loan programs offered by personal lenders. Here’s a look at each of them.
- FHA 203( k) loans – These FHA loans assist homebuyers acquire a house– and refurbish it– all with a single home loan. Homeowners can also use the program to refinance their current home mortgage and add the cost of redesigning tasks into the brand-new loan. FHA 203( k) loans been available in two types:
- The limited 203( k) has an easier application procedure, and the repairs or improvements need to total $35,000 or less.
- The standard 203( k) needs additional documentation and applies to improvements costing more than $5,000, however the total value of the home need to still fall within the FHA home loan limitation for the area.
- House Equity Conversion Mortgage, or HECM – A HECM is a popular type of reverse home mortgage and is also insured by the FHA. A HECM permits older house owners (aged 62 and up) with considerable equity or those who own their homes outright to withdraw a part of their home’s equity. The quantity that will be offered for withdrawal differs by debtor and depends on the age of the youngest debtor or eligible non-borrowing spouse, existing rate of interest and the lesser of the home’s assessed worth or the HECM FHA mortgage limitation or sales price.
- FHA Energy Efficient Mortgage (EEM) program – Energy effective home mortgages backed by the FHA permit homebuyers to acquire houses that are already energy efficient, such as EnergyStar-certified buildings. Or they can be used to purchase and remodel older homes with energy-efficient, or “green,” updates and roll the expenses of the upgrades into the loan without a bigger down payment.
- FHA Section 245( a) loan – Also called the Graduated Payment Mortgage, this program is tailored at customers whose incomes will increase with time. You begin with smaller sized regular monthly payments that slowly increase. 5 specific strategies are available: 3 plans that allow 5 years of increasing payments at 2.5 percent, 5 percent and 7.5 percent annually. Two other plans set payment boosts over 10 years at 2 percent and 3 percent yearly.
(Or call 213-474-7389 to ask a local lender anything!)
FHA Loan Limits for 2022
For 2019, the flooring limit for FHA loans in most of the country is $314,827, up from $294,515 in 2018. For high-cost locations, the ceiling is $726,525, up from $679,650 a year back. These limits are described as “ceilings” and “floors” that FHA will insure. FHA updates limit amounts each year in reaction to changing house prices.
FHA is required by law to adjust its amounts based on the loan limits set by the Federal Housing Finance Agency, or FHFA, for traditional home mortgages ensured or owned by Fannie Mae and Freddie Mac. Ceiling and flooring limitations vary according to the cost of living in a specific location, and can be different from one county to the next. Locations with a higher expense of living will have greater limits, and vice versa. Special exceptions are produced real estate in Alaska, Hawaii, Guam and the Virgin Islands, where home building and construction is more pricey.
FHA Loan Relief
Loan servicers can use some versatility on FHA loan requirements to those who have actually suffered a severe monetary hardship or are struggling to make their payments.
That relief might be in the form of a short-lived period of forbearance, a loan adjustment that would lower the interest rate, extend the payback duration, or postpone 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 Hodge CA?
The FHA makes it relatively easy to qualify for a home loan. Again, the government guarantees the loan, so lending companies are more willing to approve loans. However, mortgage lenders can (and do) set standards that are stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Hodge CA, you might have better luck with shopping around for a better option.
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 Hodge to find out for sure.
Income limits: there are none. You’ll need enough to show that you can repay the loan but these loans are geared towards lower income applicants. 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 guidelines 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 demonstrates good credit history and a solid track record of timely payments will likely be eligible for the home loan.
How to Find FHA Lenders
Debtors get their mortgage from FHA-approved lenders in Hodge instead of the FHA itself, which only insures the loans. FHA-approved loan providers can have various rates and expenses, even for the exact same loan.
FHA loans are offered through numerous sources– from the biggest banks and credit unions to neighborhood banks and independent home mortgage lending institutions. Costs, services and underwriting standards vary amongst loan providers or mortgage brokers, so it’s crucial to look around.
Learn more about how to find low FHA home loan loan provider.