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FHA loan

Learn what an FHA loan is and who it supports.

Discover the benefits of an FHA loan.

Find out the requirements to qualify for an FHA loan.

What is an FHA Loan?

FHA home loans are government-backed mortgages insured by the Federal Housing Administration (FHA).

The Federal Housing Administration is not a mortgage lender. Instead, they guarantee payments if ever the borrower defaults on the loan.

Most first-time buyers opt for an FHA mortgage loan because it requires lower credit scores and a reasonable minimum down payment.


FHA mortgages are issued through FHA-approved lenders. This loan program is popular because it supports low- to moderate-income borrowers who do not qualify for a conventional mortgage loan or those who are not able to put a 20% down payment.


However, since FHA mortgage borrowers are deemed to have a higher risk of default, they'll be required to pay for a mortgage insurance premium (MIP). This coverage is meant to protect the lenders in case the borrower is unable to make a timely monthly payment or stops making payments altogether. FHA home loans  involve two mortgage insurance premiums: upfront and annual.


FHA home loans involve two mortgage insurance premiums: upfront and annual.


Upfront mortgage insurance premium (UFMIP) is equal to 1.75% of the loan amount. This is a one-time fee the borrower must clear at closing. For example, if you borrow $250,000, your UFMIP would be $4,375. Alternatively, you can opt to add this cost to your mortgage balance.


The annual MIP rate, on the other hand, can be between .45% to 1.05% depending on the length of the mortgage term (15 years or 30 years), the mortgage amount, and the initial loan-to-value (LTV) ratio. The amount would then be divided by 12 and paid monthly. The annual MIP will be calculated every year and will be incorporated into your monthly mortgage payments.


How long you'll pay the annual MIP will depend on your down payment. If you can make a 10% or higher down payment, you'll pay the annual MIP for 11 years. But if your down payment is less than 10%, you'll have to pay the MIP for the life of the loan.


Due to their flexible requirements, FHA mortgages are easier for borrowers to obtain. Here are other big advantages that you can get from this home loan:

Low Credit Score Requirements

With an FHA mortgage, you don't need a perfect credit score. The program allows a minimum score of 500, which is lower compared to other loan programs. Typically, a conventional mortgage would require a minimum credit score of 620, USDA home loans need a 640, and a VA loan requires at least a 580 credit score.

First-time Homebuyer Friendly

The FHA loan program is insured by the federal government and offers flexible qualification guidelines created specifically for first-time homebuyers. And with the help of mortgage brokers, the loan process would also be less stressful.

Low Down Payment

With FHA home loans, you can purchase a home with as little as a 3.5% down payment with a credit score of at least 580. If your score is 500 to 579, you will have to give a 10% down payment. However, FHA mortgages allow gift funds from acceptable donors if you don't have enough cash.

Closing Cost Options

When you buy a home, you will be responsible for certain out-of-pocket expenses, such as loan origination fees, attorney fees, and appraisal costs. However, FHA mortgage loans allow the seller, home builder, or lender to pay some of these closing costs for you. If the home seller is having a hard time finding a buyer, they might just offer to help you out on the closing costs as a deal sweetener.


When applying for FHA loans, lenders will likely ask you to provide documents to prove that you'll be able to repay the mortgage. Here are some of the documents that your lender may require:

Tax Returns For The Past Two Years
There are three main reasons why lenders require your tax returns: to verify income, to determine your risk as a borrower, and to reveal your character.
Your lender will require at least two years' worth of tax returns. You'll be asked to sign a form called 4506-T which will give your lender permission to pull a copy of your taxes directly from the IRS. Your tax returns, along with any other financial documents, will also help prove that you have a stable source of income which is a very important factor for lenders.
W2s For The Past Two Years
Form W-2, also known as the Wage and Tax Statement, lets your lender know how much annual wages you've earned from your employer and the amount of taxes they withheld from your paychecks.
If you're a freelancer or an independent contractor, you'll need IRS Form 1099 showing that your client paid you money.
Bank Statements
Mortgage lenders will want you to provide them with at least 2 months' worth of the most recent bank statements on your accounts. This is to ensure that you will be able to afford your down payment and monthly mortgage payments, as well as to verify that your funds truly belong to you and didn't just appear in your accounts overnight.
Financial Statements For Other Assets (Investment Accounts And Retirement Accounts)
Other than your checking and savings account, lenders would also want to see financial statements from all of your assets, such as your investment and retirement funds. Financial statements give lenders insight into how much money you actually have and make sure that you'll be able to afford your mortgage loan.
Recent Pay Stubs
Most lenders would require loan applicants to bring their pay stubs from the past 30 days. These pay stubs would also have to show their year-to-date income totals. Pay stubs are necessary to prove that you are currently employed. Moreover, it also helps lenders determine how much mortgage you can afford based on your monthly salary, excluding bonus and overtime pay.
Proof of Other Income, Such As Social Security Or Disability Income
The FHA also accepts income from other sources such as Social Security, pensions, or disability income. To verify these sources, you need to provide an official letter or documents from your previous employer or the government. These documents should also confirm that you'll continue receiving income from these sources for the next three years.
Name And Address Of Your Employers Over The Previous Two Years
Your lender might ask about your employer's name and address. They might contact your employer to confirm if you are currently working with them and if the salary you declared is correct.
Year-To-Date Profit And Loss Statement, If You’re Self-Employed
If you are self-employed and have not filed your tax returns for the previous year yet, your lender might require you to submit a year-to-date profit and loss statement. This is for them to determine the trend in your business and if your income can afford the mortgage loan.


FHA loan eligibility is often perfect for first-time homebuyers since the program was created with them in mind. But even if you are no longer a first-time buyer, the requirements for the FHA program make it a very tempting option for some. To obtain this mortgage, FHA requires the following primary components:


FHA guidelines allow borrowers with credit scores as low as 500. But keep in mind that lenders will still have to check your financial situation and that some lenders might require higher credit scores.

3.5% down payment

If your FICO® score is 580+, you can make a minimum down payment of 3.5%. If it's between 500 to 579, your minimum down payment required would be 10%.

No Homeownership

FHA loans can assist individuals or spouses that don’t have ownership of a principal residence with a current loan (exceptions may apply).

Primary residence

The home you are buying with an FHA mortgage must be your principal residence for the next 12 months. Additionally, at least one borrower must occupy the property within 60 days after closing.

front-end debt ratio

Your front-end debt ratio, also known as the housing ratio, is the portion of your monthly income that goes to housing expenses. Your front-end ratio should not be more than 31% of your gross monthly income. However, some lenders may allow up to a 40% front-end debt ratio if your credit score is 580+.

back-end debt ratio

Also known as the debt-to-income (DTI) ratio, your back-end debt ratio is the portion of your gross monthly income that goes into paying off monthly debt expenses. Lenders prefer if your DTI is 43% or less.

Stable employment

You must show a stable employment background history or proof that you have been working for at least 2 years.

income verification

You must verify your income through pay stubs, bank statements, and federal tax returns.


FHA mortgage lenders require a home appraisal for two reasons. One is to estimate the market value of the property and the second reason is to know if the property passes the FHA appraisal guidelines.

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The FHA loan process can be overwhelming, especially for first-time home buyers. Thankfully, Ebenezer Mortgage Solutions is here to make this process fast, easy, and stress-free for you. Here's a quick rundown of how the FHA loan process works.

Step 1: Provide Basic Details

To start with the FHA loan application, we'll ask for your basic details which include your name, Social Security number, estimated income, property address, estimated value, and your requested loan amount. Ebenezer Mortgage Solutions will then process your application with various mortgage lenders.

Step 2: FHA Loan Pre-qualification
Based on the details you've provided in the first step, Ebenezer Mortgage Solutions will give you a pre-qualification letter. This letter will show an estimation of how much loan amount you'd qualify for. It can also be used to help you determine how much home you can afford.
Step 3: Compare Loan Estimates
After providing lenders with your basic details, they are required by law to give you a loan estimate within three days. Once you receive the loan estimates, compare them with each other and choose the one that would suit you best.
Once you've chosen a lender, you would have to sign an Intent to Proceed form. This notifies the mortgage lender that you want to move the loan application forward with them.
Loan Estimates
Step 4: Documentation
Your chosen mortgage lender will likely ask for additional documentation to verify your income, employment, and any other financial information. These documents can include your tax returns, bank statements, and W2s.
Step 5: Home Inspection and Appraisal
Upon giving the lender a copy of the purchase agreement, they will then order an FHA home appraisal. This step is necessary to estimate the market value of the property and ensure that the property meets the FHA's minimum property standards.
A home inspection is not really required. However, it can help detect problems with the property that the appraisal might miss. Depending on the inspection report, the buyer may have the option to back out of the contract without penalty or renegotiate the purchase price.
Step 6: FHA Underwriting
The next step would be for the underwriter to review all your information. They make sure that your application meets all the guidelines required for the FHA mortgage loan program.
During this period, the underwriter might ask you questions or request additional documents. This is to ensure that your mortgage request is reasonable and that you have the ability to repay the loan. It is imperative that you respond to these concerns as soon as possible.
Step 7: FHA Closing
Once the underwriter tags your application as 'clear to close,' a closing disclosure will then be given to you. This loan document contains all the important details about your loan application including the projected monthly payments, loan terms, and how much your closing costs will be. You'll be given at least three days to review the Closing Disclosure.
On closing day, the lender will have a final review of your loan documents. And if everything is good, the ownership of the property will then be transferred to you.

What are the FHA loan limits?

FHA mortgage loans have limits on how much you can borrow. These limits are set according to the location and type of property you want to purchase. However, FHA mortgage limits change each year to suit the current housing market.

In general, the U.S. Department of Housing and Urban Development (HUD) determined that the FHA loan limit is set at 115% of the median home price for a single-family home in a county. This is why low-cost areas have a lower limit, and high-cost areas have a higher limit.

Some FHA mortgage lenders offer jumbo mortgages. This type of mortgage is meant for an FHA purchase that is beyond the loan limit set in your area. As you might expect, the requirements for a jumbo mortgage are tighter compared to a regular FHA mortgage.


Are you getting frustrated because you don't know where to start?



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Selecting the right mortgage loan is very important. As mortgage brokers we make sure you get the best deal available for your home loan.

Conventional Loan

No PMI required with a 20% down payment.
Can be used for a wide range of property types.
Higher loan limits than some government-backed programs.
Flexible loan terms with adjustable-rate and fixed-rate options.

VA Loan

100% financing available with full VA entitlement.
No private mortgage insurance required (PMI).
No prepayment penalty.
Guaranteed by the government.
Lenders have limitations.
Loans are assumable.

FHA Loan

Low minimum credit score of 500.
Government-insured Loan program.
Flexible qualification for first-time homebuyers.
3.5% down payment with a credit score of 580+.
Closing costs could be paid by the seller, home builder, or lender.


0% down payment or lower down payment than other loan products.
Low private mortgage insurance (PMI).
Easier qualifying requirements for those with lower credit scores.
Can finance 100% of the home's purchase price.


What will disqualify me from an FHA loan?

Typically, an FHA mortgage lender prefers a FICO® Score of at least 580. Still, it's possible for you to get an FHA loan with a credit score of 500.
Other reasons that could disqualify you are having a DTI of more than 43% or the inability to afford the closing costs and down payment.

What is the FHA mortgage limit in Tampa, Florida?

For the year 2022, the loan limit for a single-family house in Tampa is $420,680.

Can I refinance an FHA loan?

Those who already have an FHA mortgage can benefit from refinancing. FHA mortgage refinance can allow you to take advantage of lower interest rates or take cash out of your home's equity. However, you need to have your current FHA loan for at least 210 days and have a history of on-time payments for the previous six months.

What is the difference between FHA and conventional loans?

Generally speaking, an FHA loan is easier to qualify for compared to a conventional mortgage. With an FHA loan, you'll be paying for MIP for the life of the loan if your down payment is less than 10%.


With a conventional loan, the PMI (private mortgage insurance) will automatically cancel once you reach 78% of your home's purchase price.


Learn more about the differences between FHA and conventional home loan programs  here.

What is the mortgage rate for FHA loans?

Because it is government-insured, an FHA mortgage program has a lower interest rate than a conventional loan. However, lenders will have different interest rates from each other. So it's best to compare FHA mortgage lenders and choose one that suits your needs best.

Are FHA loans just for first-time homebuyers?

This is a misconception. FHA mortgages are available for anyone who qualifies. But since it has more relaxed requirements, the majority of the applicants are first-time home buyers.

Can I qualify for an FHA loan with a high DTI?

Typically, the required DTI for an FHA loan is 43%. But some mortgage lenders accept a DTI of 45-50%.

Can I qualify for an FHA loan if I had a bankruptcy?

With a Chapter 7 bankruptcy, you are eligible for an FHA mortgage two years after discharge. However, you need to build up good credit and avoid taking in more debt within those two years.
With a Chapter 13, you need to show proof of at least one year of payments to your payment plan. Your documents should show that you've made your payments on time and that you have permission from the court to enter the loan transaction.

How long do FHA loans take to close?

Generally, an FHA loan process can take about 30-60 days, from application to closing. This is because it requires actions from third parties such as appraisers, home inspectors, and attorneys. Working with a mortgage broker can make the process more manageable since they'll be doing most of the paperwork for you.

Does FHA offer down payment assistance?

FHA does not offer down payment assistance, but other DPA programs can assist you with the down payment. Alternatively, the down payment can be gifted by your parents or another family member.

Can you use an FHA mortgage on investment properties?

Unfortunately, you cannot use an FHA loan on investment properties. However, you can purchase a multi-unit property in Tampa FL with an FHA mortgage. And as long as you live in one of the units, you can then rent out the other dwellings.

How can Ebenezer Mortgage Solutions help with my Tampa FHA mortgage application?

Working with our mortgage broker can get you access to multiple loan programs from different lenders without having to do the leg work. With our experience in the mortgage industry, we can answer any questions you might have regarding Tampa FHA mortgage and help you understand which one would suit best based on your financial needs and situation.
Have the home of your dreams with the FHA advantage. Call Ebenezer Mortgage Solutions today to get started.
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