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The FHA loan program is very popular with homebuyers
because of the ease of the qualification process and the low down
payment requirement.
Features and Benefits of an FHA Loan:
- Easy qualification process.
- Down payments can be less than 3% plus closing
costs and pre-paids.
- No reserves needed.
- No first-time homebuyer requirement.
- Credit issues are considered on case by case
basis.
FHA Loan Limitations:
- Loan Limits change annually and are determined
by GNMA.
- Mortgage insurance is required.
- FHA’s are not available for investment
properties.
Escrow
When you have a loan greater than 80% of loan to value, the lender
will require that you have your taxes escrowed, or put in an impound
account. This is a form of "savings account" that the
lender maintains for you. From that account, the lender pays your
insurance premiums (including hazard insurance and mortgage insurance)
and property taxes.
Citizenship
To obtain an FHA Loan, it is not required that you are a United
States citizen, however, you MUST be a permanent resident or non-resident
alien with job longevity and a social security number.
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