How To Qualify For FHA Loan in Rosamond California (Kern County)
Looking for an FHA Loan in Rosamond California?
FHA loans have been a flexible home loan program that’s been around since the 1930’s and is insured by the Federal Housing Administration (FHA). Popular with first-time home-buyers, FHA loans require flexible minimum credit scores and down payments than many conventional loans.
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 important 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 rise of foreclosures and defaults that happened in 1930s; to provide lenders with sufficient insurance; and to help stimulate the housing market by making mortgages highly accessible and attainable for consumers with less than stellar credit or a low down payment due to FHA mortgage limits in Rosamond, California. Essentially, the federal government insures loans for FHA-approved mortgage lenders in order to reduce their risk of loss if a borrower defaults on their home loan payments.
Because of that insurance, mortgage lenders 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 Rosamond 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 home loan.
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 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 Kern 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 relative, 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 changes annually after the initial fixed period. The 3/1 and 5/1 FHA Hybrid products allow 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 Rosamond California
Rosamond was established in 1877 as a townsite owned by the Southern Pacific Railroad; it was named for the daughter of one of the railroad’s officials. The first local industries were mining and cattle. During the 1890s, gold was discovered in the area, quickly drawing miners and prospectors. After the initial boom, gold mining gradually declined, though it had a second, smaller boom during the 1930s. In 1933, Muroc Army Air Field was established some 20 miles (32 km) miles away; it was later renamed Edwards Air Force Base in honor of fallen test pilot Glenn Edwards.
The Rosamond post office opened in 1885, closed in 1887, and re-opened in 1888.
In July 1932, racing driver Eddie Pullen and his team demonstrated the endurance of the newly developed Ford V-8 engine, by driving a Ford V-8, model 18, 33,301 miles (53,593 km) in 33 days, in the Mojave desert. The average speed was 42 miles per hour (68 km/h) over course of 82 miles (132 km) of difficult desert terrain, where temperatures were as high as 114 °F (46 °C). Fuel consumption averaged 19.64 miles per U.S. gallon (8.35 km/L).
Rosamond sits in the northern end of the Antelope Valley, the westernmost valley of the Mojave Desert. Because the elevation is 2,000 to 3,000 feet (610 to 910 m) above sea level, the area, like the other parts of the Mojave Desert region, is referred to as the High Desert. Some cities and communities within the trading area of Rosamond include Lancaster, Palmdale, Hi Vista, Roosevelt, Redman, Lake Los Angeles, Quartz Hill, Ridgecrest, and Santa Clarita. Residents of these desert cities and unincorporated communities share Sierra Highway, Angeles Forest Highway, Angeles Crest Highway (State Route 2), and the Antelope Valley Freeway (State Route 14) for commutes to the San Fernando Valley and Los Angeles Basin in order to get to work.
Willow Springs lies west of central Rosamond and was a watering hole for stagecoach travelers for generations, though its springs have dried up. Willow Springs Raceway is nearby, which hosts a variety of motor racing events, attracting people from all over Southern California and beyond.
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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 Kern 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!)
Types of FHA Loans
In addition to its popular FHA loan, the FHA likewise guarantees other loan programs offered by personal loan providers. Here’s a take a look at each of them.
- FHA 203( k) loans – These FHA loans help property buyers purchase a home– and renovate it– all with a single mortgage. House owners can likewise use the program to refinance their existing home mortgage and include the expense of redesigning jobs into the brand-new loan. FHA 203( k) loans can be found in 2 types:
- The restricted 203( k) has a simpler application procedure, and the repair work or enhancements should total $35,000 or less.
- The basic 203( k) requires extra documents and applies to improvements costing more than $5,000, however the overall worth of the residential or commercial property need to still fall within the FHA home mortgage limit for the area.
- House Equity Conversion Mortgage, or HECM – A HECM is a popular kind of reverse mortgage and is also guaranteed 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 quantity that will be available for withdrawal varies by debtor and depends on the age of the youngest customer or eligible non-borrowing partner, present rates of interest and the lesser of the home’s appraised value or the HECM FHA home mortgage limitation or list prices.
- FHA Energy Efficient Mortgage (EEM) program – Energy efficient home loans backed by the FHA allow property buyers to purchase houses that are already energy effective, such as EnergyStar-certified structures. 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 bigger deposit.
- FHA Section 245( a) loan – Also called the Graduated Payment Mortgage, this program is geared at debtors whose incomes will increase in time. You start out with smaller regular monthly payments that gradually increase. 5 particular strategies are offered: 3 strategies that permit 5 years of increasing payments at 2.5 percent, 5 percent and 7.5 percent annually. Two other strategies set payment increases 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 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 limitations are referred to as “ceilings” and “floorings” that FHA will insure. FHA updates restrict amounts each year in reaction to changing home costs.
FHA is needed by law to adjust its amounts based on the loan limitations set by the Federal Housing Finance Agency, or FHFA, for standard home mortgages guaranteed or owned by Fannie Mae and Freddie Mac. Ceiling and floor limitations differ according to the expense of living in a certain area, and can be different from one county to the next. Areas with a higher expense of living will have greater limits, and vice versa. Unique exceptions are made for housing in Alaska, Hawaii, Guam and the Virgin Islands, where house building is more pricey.
FHA Loan Relief
Loan servicers can use some versatility on FHA loan requirements to those who have actually suffered a major financial difficulty or are struggling 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 interest rate, extend the payback 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 Rosamond CA?
The FHA makes it relatively simple to qualify for a loan. Again, the government guarantees the loan, so lending companies are more willing to approve mortgage loans. However, mortgage lenders can (and do) set standards that may be stricter than FHA requirements. If you’re having trouble with one FHA approved lender near Rosamond 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 Rosamond to find out for sure.
Income limits: there are none. You’ll need enough to show that you can repay the home loan but these loans are geared towards lower income applicants. If you’re lucky 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 demonstrates 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 loan providers in Rosamond rather than the FHA itself, which just guarantees the loans. FHA-approved lending institutions can have various rates and expenses, even for the very same loan.
FHA loans are available through lots of sources– from the most significant banks and credit unions to community banks and independent home loan lending institutions. Expenses, services and underwriting requirements differ amongst lending institutions or mortgage brokers, so it’s crucial to shop around.
Find out more about how to discover low FHA home mortgage loan provider.