Did You Know?

FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

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Build Or Buy?


Build Or Buy?
When it’s time to consider buying a home, the Federal Housing Administration (FHA) offers two popular options. One is the traditional FHA purchase loan many use to buy a house in the suburbs. But not everyone wants to buy an existing property. Some want more control over the design and configuration of the home.

The other FHA construction loan option, the one-time close mortgage, comes in here. This option is for those who want to approve floor plans, have a say in the types of materials used to build the home and choose its features. 

Both loan types require the same low down payment of 3.5% and, depending on your downpayment, loan term, and other variables, require mortgage insurance for either 11 years or the lifetime of the mortgage. 

Is A One-Time Close Construction Loan Right For You?

An FHA construction loan, often called a "one-time close" loan, combines construction financing and a permanent mortgage into a single transaction, approval, and loan closing day. 

The borrower must choose contractors, approve floor plans, and work with the lender and builders to complete the project. 

You should have plans for a temporary living space during the construction phase if needed. In typical cases, you won’t be able to live in your new home until the work is fully completed.

This loan suits anyone looking to build a custom home tailored to their needs and preferences. However, to qualify, you may need more cash reserves, higher FICO scores, and the ability to save up your own downpayment.

Is An FHA Purchase Loan Right For You?

An FHA purchase loan is a mortgage insured by the Federal Housing Administration (FHA). It is designed to help applicants with lower FICO scores and/or those who need a smaller down payment find affordable homes.

Creditwise, many feel FHA loans are more lenient compared to conventional loans. FHA loans allow the maximum financing for applicants with FICO scores of 580 or above, though your lender may have additional standards to meet.

Who is right for an FHA purchase loan? With its escape clause guarantee that you can’t be forced to buy a home that appraises lower than the asking price, those who need an affordable home who need a house, condo, mobile home, or even a fixer-upper should look into an FHA purchase loan.

If you need downpayment assistance, an FHA purchase loan may be the best option.
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FHA Loan Articles

Important FHA Loan Terminology

Borrowers considering an FHA loan should be familiar with some basic loan terminology. These loans are popular among first-time homebuyers and those with lower credit scores because they often offer more flexible eligibility requirements and lower down payment options.

Similarities and Differences Between Co-Borrowers and Cosigners

You may have heard the terms co-borrower and cosigner in connection with your FHA loan process, but aren't sure about the distinction. Both a co-borrower and a cosigner can help a primary borrower qualify for a mortgage, but they have different roles and responsibilities.

FHA Credit Requirements and FICO Scores

The Federal Housing Administration has specific credit requirements and guidelines for borrowers looking to buy or refinance homes with an FHA loan. In addition to what FHA guidelines state, lenders may have more stringent requirements that may vary from one lender to another.

How Is a Mortgage Interest Rate Different than APR

Mortgage APR (Annual Percentage Rate) and a loan's interest rate are two different things, although they are closely related. Understanding the difference is an important part of a borrower's analysis of the true cost of their mortgage.

Refinancing With Various FHA Loan Options

FHA refinance loans allow homeowners with existing FHA loans to refinance their mortgages. These loans are designed to help borrowers take advantage of lower interest rates, reduce their monthly mortgage payments, or access equity in their homes for various purposes.

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