The primary goal of the Federal Housing Administration (FHA) is to improve the housing market by insuring home loans. By backing home loans made by approved lenders, both the buyer and lender benefit. Homebuyers receive great rates and are able to qualify with less than ideal credit while lenders are protected from borrower default. A variety of loan programs are offered by the FHA including options for purchases, refinances, financing special renovation projects, and even reverse mortgages. Canyon Mortgage Corp offers great rates on FHA loans throughout Lake Success, New Hyde Park, East Rockaway, and Floral Park.
Low down payment and relaxed credit score requirements make FHA loans very popular among first-time homebuyers. Buyers can potentially qualify for an FHA loan with a credit score of 580 and a down payment of only 3.5%. The FHA even allows down payments to be gifted from family members if the buyer does not have the cash on hand. Loan limits vary by county and can range from $271,000 up to $636,500 in high-cost areas.
The FHA offers both cash-out refinance and streamline refinance options for current FHA loan holders. To help protect borrowers, streamline refinancing is only available if the borrower will save money through the refinance. The FHA 203k loan is available to borrowers who want to take on a rehabilitation project. This unique type of home loan allows a borrower to combine the purchase of a home and the cost of renovations and repairs into a single mortgage.
No matter what type of loan you need, certain requirements must be met for all New York FHA loans.
New York FHA Loan Requirements
- Credit Score – A minimum credit score of 580 is needed to qualify while still being eligible for the minimum down payment requirement. Buyers with a score between 500 and 579 may still be able to qualify but a down payment of 10% may be needed.
- Debt-to-Income Requirements – Applicants will need a debt-to-income (DTI) ratio of 43% or less. A DTI ratio of up to 50% may be approved in special cases.
- Down Payment – 3.5% of the purchase price is the minimum down payment available. As noted above, a higher down payment may be needed depending on a borrower’s credit score.
- Property Requirements – All properties must meet certain safety, security, and soundness (structural integrity) requirements.
Every FHA loan requires two mortgage insurance premiums (MIP) to be paid. One is an up-front premium of 1.75% of the purchase price which will automatically be added to your total mortgage amount. The second premium is paid monthly as part of your mortgage payment. This premium will be between .45% and 1.05% of your annual mortgage balance. The exact rate will be based on factors such as the length of your mortgage, the total loan amount, and your loan-to-value (LTV) ratio.
Whether you are looking to purchase your very first home in New York, or are a current homeowner interested in refinancing an FHA loan, at Canyon Mortgage Corp, we offer great rates and terms on all types of FHA loans. Contact us today for more information on FHA loans throughout Lake Success, New Hyde Park, East Rockaway, and Floral Park, or to begin the pre-qualification process!