Loan Program Options
An FHA loan is a government-backed mortgage loan that allows you to buy a home with looser financial requirements. You may qualify for an FHA loan if you have debt or a lower credit score.
What is an FHA Home Loan?
An FHA Home Loan is a mortgage insured by the Federal Housing Administration (FHA), designed to make homeownership more accessible, particularly for first-time buyers and those with lower credit scores. FHA loans feature lower down payment requirements and flexible qualification criteria, making them a popular choice for many homebuyers.
Why consider an FHA Home Loan?
FHA loans offer greater accessibility and financial flexibility, making them an ideal option for individuals who might not qualify for conventional loans. Key benefits include:
Low down payment options: Borrowers can qualify with as little as 3.5% down with a credit score of 580 or higher.
Flexible credit requirements: FHA loans accommodate borrowers with lower credit scores, providing more opportunities for homeownership.
Competitive interest rates: Government backing helps keep interest rates lower than some conventional loan options.
Assumable mortgages: FHA loans are assumable, meaning a future buyer can take over the loan’s terms, potentially saving money if rates rise.
FHA loans are designed to help buyers overcome common financial barriers, but they also require mortgage insurance premiums (MIP) for the duration of the loan unless refinanced.
Benefits of FHA Mortgage Loans
Looking to purchase a house in Los Angeles or anywhere in California but can't apply for a traditional mortgage? FHA loan is an excellent option. The guidelines and requirements for an FHA mortgage are much more lenient: a low FICO score and small down payment are OK.
Perfect for the First-Time Home Buyers: This is an ideal mortgage loan for first-time home buyers. These loans are popular among first-time buyers because of low down payments and flexible qualifying guidelines.
Low-Interest Rates: FHA loans have lower interest rates. This happens because the lender takes less risk.
Finances for Home Repairs: Need some extra funds to repair the house? The FHA has a particular loan for that. It is not based on the home's current value but on the projected one.
Gift Fund as a Downpayment: You can use a gift fund as 100% of a down payment on your house (for primary residences only).
How to qualify for an FHA loan
To be eligible for an FHA loan, borrowers must meet the following lending guidelines:
- Have a FICO score of 500 to 579 with 10 percent down or a FICO score of 580 or higher with 3.5 percent down.
- Have verifiable employment history for the last two years.
- Have verifiable income through pay stubs, federal tax returns, and bank statements.
- Use the loan to finance a primary residence.
- Ensure the property is appraised by an FHA-approved appraiser and meets HUD guidelines.
- Have a front-end debt ratio (monthly mortgage payments) of no more than 31 percent of gross monthly income.
- Have a back-end debt ratio (mortgage plus all monthly debt payments) of no more than 43 percent of gross monthly income (lenders could allow a ratio up to 50 percent, in some cases).
- Wait for one to two years before applying for the loan after bankruptcy or three years after foreclosure (lenders might make exceptions on these waiting periods for borrowers with extenuating circumstances).
Your Goals. Your Home. Your Brightside.
Home financing should feel empowering, not overwhelming. At Brightside Mortgage, we’re committed to helping you achieve homeownership with confidence, clarity, and peace of mind. Let’s turn your homeownership dreams into reality—together.
