How To Qualify For FHA Loan in Santa Susana California (Ventura County)

How To Qualify For FHA Loan in Santa Susana California (Ventura County)

Looking for an FHA Loan in Santa Susana California?

An FHA loan is a home loan that’s 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 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 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 much more accessible and affordable for people with not so great credit or a low down payment due to FHA mortgage limits in Santa Susana, 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 lenders can, and do, offer FHA home loans 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 Santa Susana 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 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 scenario.

Another advantage of an FHA mortgage 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 Ventura 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 enable 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 adjusts annually after the initial fixed period. 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 modification. This insures that the payment adjustment will be very little even on a worst case rate change.

About Santa Susana California

The hills of and immediate foots of the Santa Susana Mountains have been inhabited for thousands of years, proven by Chumash artifacts found by the Santa Susana Depot and Chumash pictographs dating to 500 AD in the Burro Flats Painted Cave. The area has likely been populated by Native-American peoples for as much as 8,000 years-12,000 years ago The Burro Flats Painted Cave, now situated on the protected private Santa Susana Field Laboratory property, was the setting for a winter solstice ritual for the Ventureño Chumash people. The cave, which is on the back wall of a sandstone shelter about 16 ft long and 4 ft high, was discovered at the turn of the 20th century The Chumash of Santa Susana were unlike other settlements in the Simi Valley not only located near other Ventureño Chumash settlements, but the Chumash here traded with the Tataviam people who also settled in the Santa Susana Mountains, as well as the Gabrielino people who inhabited the opposite side of the Santa Susana Pass.

In 1887, the Simi Valley Land and Water Company first surveyed the area to sell parcels as ranches. With the Santa Susana Depot establishment by the Southern Pacific Company in 1903 as its cornerstone, the town of Santa Susana a few miles east of Simi Valley in the Simi Valley was founded. Before this train station, all residents of the Simi Valley had to travel to San Fernando for the closest railroad station. The first businesses surrounding the new train station was also vital for the town’s establishment, and the discovery of oil on El Rancho Tapo in 1910 brought a population boom to the little town. A general merchandise store on the opposite side of Los Angeles Avenue from the railroad station was the first store established in town, established by Horace Crinklaw and his wife in 1909. In 1914, the town was home to eight buildings: Four owned by the Crinklaw family, a schoolhouse, the Santa Susana Depot, the Southern Pacific Warehouse and a blacksmith shop. Oil production was started by the Scarab Oil Company in 1910 and opened with a production of 300 barrels of oil per day. The little town soon became well known as a filming location for Western movies with its rural and rugged surroundings with plentiful sand rock formations; Western films were filmed here as early as in 1920 on the main street of Santa Susana. By 1918, there were 101 registered voters in Santa Susana.

In 1929, the town was used as a set in the movie Welcome Danger The Santa Susana Airport started as a dirt landing strip in a tomato field in the late 1930s, and later became a paved landing site for hundreds of airplanes in the 1970s. It was officially designed by the FAA in 1944. During all of the 1930s and 1940s, the Corriganville Movie Ranch functioned as a Western movie set for hundreds of Western films and TV series, and later an amusement park for visitors to explore the Western film sets. Films shot here include for instance Jungle Jim, the Jungle Boy TV-series, Lawman, Gunfight at the O.K. Corral, Adventures of Robin Hood, Adventures of Superman, Fort Apache, Rin-Tin-Tin TV-show, and hundreds of others. The ranch became a tourist attraction in 1949 and drew thousands from across America and was rated among the “10 most interesting places in America”. The first larger housing developments started in 1958.

The area has been home to numerous cults, including the Pisgah Grande (in Las Llajas Canyon, seven miles northeast of town) and May Otis Blackburn’s “Divine Order of the Royal Arms of the Great Eleven”, sometimes referred to as “the Sixth Cult”, high up in the Susana Knolls. In 1949, messiah Krishna Venta’s cult “WKFL Foundation of the World” lived in Box Canyon right by the Santa Susana Pass. Krishna was killed in 1958, when former members exploded twenty dynamites in a suicide attack against Krishna and other cult members. It was also here that Charles Manson and the Manson Family partially lived during the late 1960s. The Santa Susana Nuclear Disaster in July 1959 was the worst in American history, and was kept hidden by the United States Atomic Energy Commission for more than twenty years when it was exposed by students from UCLA in the LA Times.

By a 2-1 margin in 1969, voters decided to be incorporated in the City of Simi Valley. On October 10, 1969, the majority of Santa Susana went from being an unincorporated town in the Simi Valley to a part of the city of Simi Valley, which now comprised most of the eponymous valley.

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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 Ventura 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 Mortgage Loans

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

  • FHA 203( k) loans – These FHA loans assist property buyers acquire a home– and refurbish it– all with a single home loan. House owners can likewise utilize the program to refinance their existing mortgage and include the cost of renovating jobs into the new loan. FHA 203( k) loans been available in 2 types:
    • The restricted 203( k) has a much easier application process, and the repair work or enhancements should amount to $35,000 or less.
    • The standard 203( k) needs additional documentation and applies to enhancements costing more than $5,000, but the overall value of the residential or commercial property need to still fall within the FHA home loan limitation for the location.
  • Home Equity Conversion Mortgage, or HECM – A HECM is a popular type of reverse home loan and is also guaranteed by the FHA. A HECM permits older homeowners (aged 62 and up) with significant equity or those who own their houses outright to withdraw a portion of their house’s equity. The amount that will be offered for withdrawal differs by debtor and depends on the age of the youngest borrower or qualified non-borrowing partner, present interest rates and the lower of the house’s appraised value or the HECM FHA mortgage limitation or list prices.
  • FHA Energy Efficient Mortgage (EEM) program – Energy efficient home mortgages backed by the FHA allow homebuyers to purchase homes that are currently energy efficient, such as EnergyStar-certified buildings. Or they can be used to buy and redesign older houses with energy-efficient, or “green,” updates and roll the costs 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 geared at debtors whose earnings will increase gradually. You start with smaller sized month-to-month payments that slowly increase. 5 specific strategies are available: 3 plans that permit five years of increasing payments at 2.5 percent, 5 percent and 7.5 percent annually. Two other plans 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 flooring limitation for FHA loans in most of the nation 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 limitations are referred to as “ceilings” and “floorings” that FHA will guarantee. FHA updates restrict quantities each year in action to altering house costs.

FHA is needed by law to adjust its quantities based upon the loan limitations set by the Federal Housing Finance Agency, or FHFA, for traditional mortgages ensured or owned by Fannie Mae and Freddie Mac. Ceiling and floor limitations differ according to the cost of living in a specific area, and can be various from one county to the next. Locations with a greater cost of living will have greater limitations, and vice versa. Special exceptions are made for housing in Alaska, Hawaii, Guam and the Virgin Islands, where home building and construction is more costly.

FHA Loan Relief

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

That relief might be in the form of a temporary duration of forbearance, a loan modification 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 Santa Susana CA?

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

Note: you never know until you put in an application. Even if you think you won’t qualify after reading this page, talk with an FHA approved lender in Santa Susana 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 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 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 attests good credit history and a solid track record of timely payments will likely be eligible for the home loan.

How to Find FHA Lenders

Customers get their mortgage from FHA-approved loan providers in Santa Susana rather than the FHA itself, which just insures the loans. FHA-approved loan providers can have various rates and expenses, even for the same loan.

FHA loans are available through many sources– from the greatest banks and cooperative credit union to neighborhood banks and independent home mortgage lending institutions. Costs, services and underwriting requirements differ amongst lenders or home loan brokers, so it’s important to search.

Discover more about how to discover low FHA home loan loan provider.

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