QuickHome.Loans
QuickHome.Loans

FHA Refinance Loans

What is an FHA Home Loan?

These loans are programs offered by participating lenders which are insured by the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD).

What are the benefits of an FHA Home Loan?

  • Down payments as low as 3.5%
  • The seller can contribute up to 6% of the sale price
  • A parent or relative can co-sign on the loan as a non-occupant.

FHA loans do require mortgage insurance to protect lenders from losses as a result of defaults. Upfront mortgage insurance premiums can be financed as part of the loan. You will be responsible for paying the annual insurance premium.

Who is eligible for an FHA Refinance Loan?

An underwriter will analyze your income, assets, liabilities, and credit history when you apply. Less-than-perfect credit does not necessarily prevent you from qualifying. You must meet the following requirements:

  • You must have at least 3.5% of the purchase price for a down payment
  • Your monthly mortgage payment cannot exceed 50% of your monthly income
  • You must have two years of consistent employment and verifiable income

What kinds of properties can FHA Loans be used for?

The following kinds of properties are eligible:

  • 1-4 unit primary residences
  • Condo units approved by FHA
  • Manufactured housing (must have a permanent foundation and be considered a permanent dwelling)

Looking at Financing Renovations?

The FHA 203(k) loan is an option for homeowners looking to finance repairs and renovations. It combines the cost of purchasing or refinancing the home with the cost of the renovation. There are two main types:

  1. FHA 203(k) Streamline Loans
    • Allows you to borrow up to $35,000 for repairs.
    • Ideal for smaller, non-structural repairs such as painting, flooring, or minor upgrades.
    • Does not require an appraisal, making the process quicker and easier.
  2. Standard FHA 203(k) Loans
    • For more extensive renovations, with a minimum of $5,000 in repairs.
    • No maximum loan amount, allowing for larger projects.
    • Permits structural work such as adding rooms or repairing major systems.
    • Requires an appraisal to assess the home’s current value and project cost.

Both options help fund home repairs and renovations with a single loan, which can be a cost-effective way to improve a property without depleting savings or taking on high-interest debt.

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