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Brownsville FHA Home Loans

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Brownsville FHA Home Loans

For many, one of the biggest hurdles to homeownership is having enough money for a substantial down payment. But if you only explore your options, you’ll realize it doesn’t have to be! With its lower credit score and more affordable down payment requirements, the FHA home loan can help turn homeownership dreams into a reality. 

What is an FHA Loan?

The FHA loan is a government-backed mortgage created and insured by the Federal Housing Administration. These loans are quite a hit with first-time homebuyers because they require lower minimum credit scores and down payments than many other types of mortgages. According to the FHA’s 2020 Annual Report, more than 83% of all FHA loans were awarded to borrowers buying their first homes.

Types of FHA Loans

The FHA has several home loan programs that cater to homebuyers’ varying needs and lifestyle requirements. If you qualify for a Brownsville FHA loan, you may choose among the following mortgage products to help you finance your new home purchase.

  • FHA 203(b) Loan – 

The FHA 203(b) loan is popular among first-time home buyers looking to purchase move-in-ready homes. This is an excellent option if you have your eyes set on or want to buy a home that doesn’t require significant renovations.

  • FHA 203(k) Loan – 

Many old homes have the potential to be a diamond in the rough with some TLC. You can use the FHA 203(k) loan to buy a fixer-upper home and finance the renovations that will make it more livable.

  • FHA Section 245(a) – 

Also called the Growing Equity Mortgage, this program is aimed at borrowers expecting their incomes to increase gradually in the next few years. The mortgage starts with lower initial monthly payments that increase over time, shortening loan durations. It’s perfect for homebuyers looking to improve their home equity rapidly. 

  • FHA EEMP – 

The FHA Energy Efficient Mortgage Program is similar to the FHA 203(k) Improvement Loan program. Still, it focuses on energy-efficient upgrades that lower your home’s energy consumption, such as new insulation or solar energy systems. The idea is that energy-efficient homes tend to spend less money on utility bills, so more of it can go towards mortgage payments. 

Brownsville FHA Loan Requirements

Despite its reputation as a first-time homebuyer loan, FHA loans are also available to eligible repeat homebuyers. 

Designed to make homeownership easier for Americans, the FHA products have more lenient standards than most mortgages. However, interested borrowers must still meet minimum FHA loan requirements and basic lending guidelines to qualify.

  • Credit Score and Down Payment: 

You’ll need a credit score of at least 580 to qualify for the 3.5% down payment rate. Lower than that, you’ll need to pay 10% of the home’s purchase price upfront (sometimes more). 

  • Debt-to-Income (DTI) Ratio: 

Lenders typically require a maximum front-end DTI ratio of 31% (allocated to housing payments) and a back-end ratio (for debt payments) that’s no higher than 43% of the household’s gross monthly income.

  • Income and Employment: 

The FHA loan has no income limits, but you’ll have to provide proof of steady income and employment for the past two years.

  • Foreclosure and Bankruptcy: 

You’ll need to wait three years after losing a home to foreclosure and two years after you were released from a Chapter 7 bankruptcy before you can qualify for an FHA loan. These waiting periods are significantly shorter than that of traditional mortgages.

  • FHA Loan Limits: 

The FHA loan limit for Brownsville, Texas, is $420,680 for single-unit homes, $538,650 for two-unit homes, $651,050 for three-unit dwellings, and $809,150 for four-unit homes. 

Is An FHA Loan For You?

Regardless of your situation, you may want to consider an FHA loan when purchasing or refinancing a home. FHA loans have more lenient approval requirements, so you have higher chances of qualifying even with less-than-ideal credit.

You can visit the local HUD office or contact Capital Home Mortgage if you need more information or assistance. We’ll help you determine whether the FHA loan is the best option for you and how you can use it to optimize your homebuying ability.

Call (956) 307-3422 to start your FHA loan application.

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Brownsville FHA Mortgage Rates

Brownsville FHA Purchase Loan

FHA Home Loans are mortgage loans for 1st time home buyers, buyers with limited credit, buyers with less than perfect credit and buyers with higher debt to income ratios.  As the goal of FHA is to make homeownership more attainable, FHA underwriting guidelines are less strict than other mortgage loan programs.  This FHA flexibility allows for easier loan qualification making the barrier to homeownership less challenging.
  • Simple Qualifying
  • Small Down Payment
  • Seller Paid Closing Costs to 6%
  • Flexible Underwriting
  • Higher Debt to Income Ratios Allowed
  • Lower Credit Scores Allowed
    • 580 with 3.5% Down Payment
    • 500 with 10% Down Payment
  • Manufactured Housing OK (Subject to Restrictions)
FHA Purchase Home Lender
FHA Home Loans are mortgage loans for 1st time home buyers, buyers with limited credit, buyers with less than perfect credit and buyers with higher debt to income ratios.  As the goal of FHA is to make homeownership more attainable, FHA underwriting guidelines are less strict than other mortgage loan programs.  This FHA flexibility allows for easier loan qualification making the barrier to homeownership less challenging.
  • Simple Qualifying
  • Small Down Payment
  • Seller Paid Closing Costs to 6%
  • Flexible Underwriting
  • Higher Debt to Income Ratios Allowed
  • Lower Credit Scores Allowed
    • 580 with 3.5% Down Payment
    • 500 with 10% Down Payment
  • Manufactured Housing OK (Subject to Restrictions)

Brownsville FHA Refinance Loan

FHA offers a streamline refinance program that simply reduces the interest rate and lowers the payment or shortens the term of the loan.  This rate and term option can be fully documented loans, or can be reduced documentation.  The other FHA option is a cash-out refinance allowing homeowners the ability to access the equity in the property. (Not Allowed in Texas)
  • Streamline – Rate and Term Only
    • No Appraisal
    • No Income Verification
  • Full Documentation
    • Rate and Term
    • Closing Costs Can be Rolled In
    • Lower Credit Scores Allowed
      • 580 with 3.5% Down Payment
      • 500 with 10% Down Payment
    • Manufactured Housing OK (Subject to Restrictions)
FHA Home Refinance Lender

FHA offers a streamline refinances that simply reduces the interest rate and lowers the payment or shortens the term of the loan.  This rate and term option can be fully documented loans, or can be reduced documentation. The other FHA option is a cash-out refinance allowing homeowners the ability to access the equity in the property. (Not Allowed in Texas)

FHA Standard Refinance

  • Appraisal Required
  • 97.75% Max Loan to Value
  • Closing Costs Can Be Rolled In
  • 80% Max Loan to for Cash-out
  • Cash-out Option Available
  • County Loan Limits Apply

FHA Streamline Refinance

  • FHA to FHA
  • No Income Qualification
  • No Appraisal Required
  • Closing Costs Cannot Be Rolled In
  • No Lates on Mortgage in Last Year
  • Payment Must Drop on Fixed Rates

Brownsville FHA 203K Loan

FHA offers a rehabilitation loan that can be used either with a purchase of a new home or as part of a refinance.  The FHA 203K Home loan is offered to allow homeowners to purchase less than perfect homes or to bring the current home up to date with improvements.

Purchase and Refinance

On Purchases, Max Loan is lesser of:

  • Adjusted As-is Value plus allowable financeable rehabilitation cost plus fees/reserves; or 110% of After-Improved Value (100% for condominiums)

On Refinances, Max Loan is lesser of:

  • Existing Debt plus financeable Rehabilitation Cost plus Prepaid and Closing Cost; or 97.75% multiplied by lesser of: As-is value plus rehabilitation cost; • 110% of After-Improved Value (100% for condominiums)

Eligible Properties

(Owner-Occupied Only):

  • PUDs (Planned Unit Developments)
  • 1 to 4 Units
  • Doublewide Manufactured Home
  • Condominium (in FHA Approved Projects)

Mixed Use Properties Allowed:

  • A minimum of 51% of the entire building’s square footage must be used for residential use.

FHA 203K Full Rehab

  • Full 203K – allows improvements to exceed the 35K cap on renovations.  The improvements are not limited cosmetic, but can be include major structural including an addition. This can be combined with a purchase or with a fully documented refinance. 

FHA 203K Streamline Rehab

  • Streamline 203K – allows for up to 35K of improvements to be financed into the loan.   This can be combined with a purchase or with a fully documented refinance. The improvements are typically cosmetic, but can be limited structural as long as the improvements are not for an addition.
FHA 203k Home Lender

FHA offers a rehabilitation loan that can be used either with a purchase of a new home or as part of a refinance.  The FHA 203K Home loan is offered to allow homeowners to purchase less than perfect homes or to bring the current home up to date with improvements.

Purchase and Refinance

On Purchases, Max Loan is lesser of:

  • Adjusted As-is Value plus allowable financeable rehabilitation cost plus fees/reserves; or 110% of After-Improved Value (100% for condominiums)

On Refinances, Max Loan is lesser of:

  • Existing Debt plus financeable Rehabilitation Cost plus Prepaid and Closing Cost; or 97.75% multiplied by lesser of: As-is value plus rehabilitation cost; • 110% of After-Improved Value (100% for condominiums)

Eligible Properties

(Owner-Occupied Only):

  • PUDs (Planned Unit Developments)
  • 1 to 4 Units
  • Doublewide Manufactured Home
  • Condominium (in FHA Approved Projects)

Mixed Use Properties Allowed:

  • A minimum of 51% of the entire building’s square footage must be used for residential use.

FHA 203K Full Rehab

  • Full 203K – allows improvements to exceed the 35K cap on renovations.  The improvements are not limited cosmetic, but can be include major structural including an addition. This can be combined with a purchase or with a fully documented refinance. 

FHA 203K Streamline Rehab

  • Streamline 203K – allows for up to 35K of improvements to be financed into the loan.   This can be combined with a purchase or with a fully documented refinance. The improvements are typically cosmetic, but can be limited structural as long as the improvements are not for an addition.
Not Sure? Take a Look at Other Brownsville Mortgage Programs

Brownsville Mortgage Team

Conor Hayhurst

Managing Director
NMLS 743506

Damon Embler

Loan Officer
NMLS 882260

Kelly Cameron

Loan Officer
NMLS 178093

Lynette Surman

Loan Officer
NMLS 2097265

Brownsville Mortgage Company Reviews

What is a Brownsville FHA Mortgage Loan?

FHA stands for “Federal Housing Administration” which is part of HUD ”Housing and Urban Development”.Established in 1934 and prompted by the great depression FHA had one goal: to make homeownership affordable. A great step in our nation’s history as the majority of Americans were renters, not having large down payments that traditional banks required.It is important to understand that FHA doesn’t lend money.  FHA instead provides lenders a guarantee that covers the lenders from loss in the event of a foreclosure. It simple terms FHA insures the portion of the loan that a buyer would have would normally had to put down to qualify for a traditional loan, allowing for small down payments to purchase.  All FHA loans require mortgage insurance.  The mortgage insurance comes in an upfront fee, which can be financed into the loan and a monthly fee made through the mortgage payment.  These installments from the payments support the guarantee fund and makes FHA loans possible.  This fee is fixed for the term of the loan and is the same regardless of credit. 

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