How To Qualify For FHA Loan in Wonderland Mobile Home Park California (Shasta County)

How To Qualify For FHA Loan in Wonderland Mobile Home Park California (Shasta County)

Looking for an FHA Loan in Wonderland Mobile Home Park California?

An FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA). Popular with first-time home-buyers, FHA loans require lower minimum credit scores and down payments than many commonplace 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 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 increase of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with sufficient insurance; and to help spark the housing market by making home loans much more accessible and attainable for consumers with less than perfect credit or a low down payment due to FHA mortgage limits in Wonderland Mobile Home Park, 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 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.


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

Typically an FHA loan in Wonderland Mobile Home Park 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 mortgage 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 loan 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 Shasta 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 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 time frame. 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.

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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 property. 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 Shasta 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 Home Loans

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

  • FHA 203( k) loans – These FHA loans help property buyers buy a house– and renovate it– all with a single home mortgage. Homeowners can also use the program to re-finance their existing home mortgage and include the cost of remodeling projects into the brand-new loan. FHA 203( k) loans been available in 2 types:
    • The limited 203( k) has a much easier application process, and the repair work or improvements should total $35,000 or less.
    • The standard 203( k) needs additional documentation and applies to enhancements costing more than $5,000, however the total worth of the home need to still fall within the FHA mortgage limit for the location.
  • Home Equity Conversion Mortgage, or HECM – A HECM is a popular type of reverse home mortgage and is likewise insured by the FHA. A HECM enables older homeowners (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 differs by debtor and depends on the age of the youngest borrower or eligible non-borrowing partner, present rates of interest and the lesser of the home’s assessed value or the HECM FHA home mortgage limit or list prices.
  • FHA Energy Efficient Mortgage (EEM) program – Energy effective home mortgages backed by the FHA allow homebuyers to buy homes that are currently energy efficient, such as EnergyStar-certified buildings. Or they can be utilized to purchase and renovate 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 known as the Graduated Payment Mortgage, this program is tailored at borrowers whose incomes will increase gradually. You start with smaller month-to-month payments that slowly increase. Five specific plans are offered: three plans that permit five years of increasing payments at 2.5 percent, 5 percent and 7.5 percent every year. 2 other strategies set payment boosts 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 limitation for FHA loans in the majority of the nation 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 guarantee. FHA updates restrict amounts each year in action to changing house rates.

FHA is required by law to change its amounts based upon 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 floor limitations differ according to the expense of living in a particular location, and can be different from one county to the next. Locations with a greater expense of living will have higher limitations, and vice versa. Special exceptions are made for housing in Alaska, Hawaii, Guam and the Virgin Islands, where home construction is more pricey.

FHA Loan Relief

Loan servicers can use some flexibility on FHA loan requirements to those who have suffered a severe financial difficulty or are struggling to make their payments.

That relief might be in the form of a short-term duration of forbearance, a loan modification that would decrease the interest rate, extend the payback period, 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 Wonderland Mobile Home Park 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 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 Wonderland Mobile Home Park CA, you might have better luck with looking around for another.

Note: you never know until you apply. Even if you think you won’t qualify after reading this page, talk with an FHA approved lender in Wonderland Mobile Home Park 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 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 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 demonstrates good credit history and a solid track record of timely payments will likely be eligible for the mortgage.

How to Find FHA Lenders

Debtors get their home mortgage from FHA-approved lenders in Wonderland Mobile Home Park rather than the FHA itself, which only insures the loans. FHA-approved lending institutions can have various rates and expenses, even for the exact same loan.

FHA loans are available through lots of sources– from the biggest banks and cooperative credit union to community banks and independent home mortgage loan providers. Costs, services and underwriting requirements differ among lenders or home loan brokers, so it’s important to shop around.

Find out more about how to find low FHA mortgage lender.


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