FHA loans are federally insured loans that are typically geared to first time buyers because they are more flexible with credit scores and require less money as a down payment. However, in recent days, there have been announcements about loan forbearance, much of which are related to FHA loans, and this makes it more difficult to obtain an FHA loan.
Why?
In an FHA loan, if a borrower can’t make the payment, the servicer of the loan is still required to make that payment on their borrower’s behalf. Yes, the borrower still owes the servicer that money, but it makes it more difficult for servicers if many borrowers aren’t making their payments. Therefore, many lenders now can’t or won’t process FHA loans and if they do, those loans have higher requirements with more expensive rates and fees.
If you are a first time buyer and need a loan, I’m familiar with a no-money-down loan that requires only an earnest money payment of $1,000 and closings costs, but nothing towards the loan itself. This loan is also a conventional loan, so it doesn’t have to fit with FHA requirements. If you need to buy a house and worry about being able to qualify, this program may work for you. I’m always available to answer questions about your particular circumstances, so feel free to reach out to me if you have questions about qualifying.