The economy and the credit crunch has made it hard for prospective homeowners to get a loan, and the ones who have only small amounts for down payments have it even harder. But it’s not impossible  to acquire a low down-payment loan. The Federal Housing Administration is offering a 3.5% down payment loan option for qualified buyers.

When you get an FHA loan, you come very little out of pocket, so for those who have steady jobs and a desire to own a home, you might be in luck!

Income is the main factor in determing who qualifies for the loan. Loan recipients are to spend no more than 31% of their gross income on mortgage payments. Lenders will also look at your credit history, although your credit score doesn’t determine your mortgage rate. FHA borrowers get the same interest rate that any conforming borrower with a good credit score would get.

As an FHA borrower, you’ll also be charged an insurance premium, to cover any possible future defaults. You might pay an up-front fee of 1.5 to 2.5%, and pay 0.5% annually of the loan amount. There’s also a limit to the amount that can be borrowed, and in most cities, it’s $271,500.

If you’re looking into FHA loans and need assistance, leave a comment below with your questions or concerns.

This entry was posted on Tuesday, January 20th, 2009 at 11:35 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.