How To Qualify For FHA Loan in Old Fig Garden California (Fresno County)
Looking for an FHA Loan in Old Fig Garden California?
An FHA loan is a home loan that’s insured 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 significant to remember though, that the lower the credit score, 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 qualifications.
The FHA program was created in response to the rise of foreclosures and defaults that happened in 1930s; to provide lenders with sufficient insurance; and to help stimulate the housing market by making home loans more accessible and affordable for consumers with less than perfect credit or a low down payment due to FHA mortgage limits in Old Fig Garden, 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 home loan payments.
Because of that insurance, mortgage companies can, and do, offer FHA mortgages at beneficial 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 Old Fig Garden 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 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 mortgage is that it’s an assumable home loan which means if you want to sell your house, 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 Fresno 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 aggressive 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 adjusts annually after the initial fixed time frame. The 3/1 and 5/1 FHA Hybrid products enable 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 very little even on a worst case rate change.
About Old Fig Garden California
Old Fig Garden (formerly, Fig Garden) is a census-designated place in Fresno County, California. It lies at an elevation of 312 feet (95 m). The city of Fresno, through annexations, has entirely circled Fig Garden. Old Fig Garden’s population was 5,365 at the 2010 census.
At the 2010 census Old Fig Garden had a population of 5,365. The population density was 3,247.5 people per square mile (1,253.9/km). The racial makeup of Old Fig Garden was 4,000 (74.6%) White, 105 (2.0%) African American, 54 (1.0%) Native American, 209 (3.9%) Asian, 10 (0.2%) Pacific Islander, 733 (13.7%) from other races, and 254 (4.7%) from two or more races. Hispanic or Latino of any race were 1,532 persons (28.6%).
The census reported that 5,337 people (99.5% of the population) lived in households, 28 (0.5%) lived in non-institutionalized group quarters, and no one was institutionalized.
There were 2,121 households, 602 (28.4%) had children under the age of 18 living in them, 1,052 (49.6%) were opposite-sex married couples living together, 229 (10.8%) had a female householder with no husband present, 108 (5.1%) had a male householder with no wife present. There were 104 (4.9%) unmarried opposite-sex partnerships, and 35 (1.7%) same-sex married couples or partnerships. 580 households (27.3%) were one person and 246 (11.6%) had someone living alone who was 65 or older. The average household size was 2.52. There were 1,389 families (65.5% of households); the average family size was 3.08.
The age distribution was 1,176 people (21.9%) under the age of 18, 439 people (8.2%) aged 18 to 24, 1,084 people (20.2%) aged 25 to 44, 1,741 people (32.5%) aged 45 to 64, and 925 people (17.2%) who were 65 or older. The median age was 44.7 years. For every 100 females, there were 96.2 males. For every 100 females age 18 and over, there were 92.7 males.
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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 home loan or to buy the house. 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 Fresno 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 insures other loan programs used by private lending institutions. Here’s a look at each of them.
- FHA 203( k) loans – These FHA loans help property buyers acquire a home– and renovate it– all with a single home mortgage. House owners can likewise utilize the program to re-finance their existing home loan and include the cost of redesigning jobs into the brand-new loan. FHA 203( k) loans been available in 2 types:
- The restricted 203( k) has a much easier application process, and the repairs or improvements must total $35,000 or less.
- The basic 203( k) needs additional documents and applies to enhancements costing more than $5,000, but the overall worth of the home must still fall within the FHA mortgage limitation for the location.
- House Equity Conversion Mortgage, or HECM – A HECM is a popular kind of reverse home mortgage and is also insured by the FHA. A HECM allows older house owners (aged 62 and up) with substantial equity or those who own their houses outright to withdraw a portion of their house’s equity. The amount that will be available for withdrawal differs by debtor and depends on the age of the youngest customer or qualified non-borrowing partner, current rate of interest and the lesser of the house’s assessed worth or the HECM FHA home mortgage limitation or prices.
- FHA Energy Efficient Mortgage (EEM) program – Energy effective home loans backed by the FHA permit homebuyers to buy houses that are currently energy effective, such as EnergyStar-certified buildings. Or they can be utilized to purchase and remodel older houses with energy-efficient, or “green,” updates and roll the expenses of the upgrades into the loan without a larger down payment.
- FHA Section 245( a) loan – Also known as the Graduated Payment Mortgage, this program is tailored at borrowers whose earnings will increase in time. You start with smaller sized month-to-month payments that slowly go up. 5 particular plans are available: three plans that permit five years of increasing payments at 2.5 percent, 5 percent and 7.5 percent yearly. 2 other strategies set payment increases over 10 years at 2 percent and 3 percent annually.
(Or call 213-474-7389 to ask a local lender anything!)
FHA Loan Limits for 2023
For 2019, the floor limit for FHA loans in most 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 earlier. These limits are described as “ceilings” and “floorings” that FHA will insure. FHA updates limit amounts each year in reaction to changing home rates.
FHA is required by law to adjust its amounts based upon the loan limitations set by the Federal Housing Finance Agency, or FHFA, for standard home mortgages ensured or owned by Fannie Mae and Freddie Mac. Ceiling and flooring limitations vary according to the expense of living in a certain location, and can be different from one county to the next. Locations with a higher cost of living will have higher limitations, and vice versa. Special exceptions are made for housing in Alaska, Hawaii, Guam and the Virgin Islands, where house construction is more expensive.
FHA Loan Relief
Loan servicers can use some versatility on FHA loan requirements to those who have suffered a serious financial hardship or are having a hard time to make their payments.
That relief might be in the form of a short-lived duration of forbearance, a loan adjustment that would lower the rates of interest, extend the repayment period, or delay 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 Old Fig Garden CA?
The FHA makes it relatively simple to qualify for a loan. Again, the government guarantees the loan, so lenders are more willing to approve loans. However, lending companies can (and do) set standards that may be stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Old Fig Garden CA, you might have better luck with choosing 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 Old Fig Garden 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 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 requirements 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 shows good credit history and a solid track record of timely payments will likely be eligible for the mortgage.
How to Find FHA Lenders
Borrowers get their mortgage from FHA-approved lenders in Old Fig Garden rather than the FHA itself, which just insures the loans. FHA-approved lenders can have various rates and costs, even for the very same loan.
FHA loans are offered through many sources– from the most significant banks and cooperative credit union to neighborhood banks and independent mortgage loan providers. Expenses, services and underwriting requirements differ among lenders or home mortgage brokers, so it’s essential to shop around.
Learn more about how to discover low FHA home loan lending institution.