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Texas FHA Home Loans

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Texas FHA Mortgage Lender

Texas FHA Home Loans

Homebuyers have plenty of options for funding the purchase of their new home. One of the more popular options is FHA loans, which were created to make homeownership more accessible and more affordable for most Americans.

What is an FHA Loan?

The Federal Housing Administration has been helping American families secure housing since 1934. And this commitment to affordable homeownership lives to this day through the FHA home loan program, which plays an indispensable role in the country’s economy.

Despite the name, the Federal Housing Administration only guarantees FHA loans; they do not originate them. Private lenders issue FHA loans, but the government’s insurance against defaults allows them to finance homes for buyers who might not qualify for conventional mortgage products.

FHA Loan Eligibility Requirements

To be eligible for an FHA loan in Texas, you must fulfill the following requirements:

  • Credit Rating – Individuals with a credit score of at least 580 can get an FHA loan with a 3.5% down payment. You may, however, qualify for an FHA loan even with a credit score as low as 500, but you’ll have to make a 10% down payment.
  • Down Payment – Lenders generally follow the down payment rate set by the FHA, but some of them may be more flexible and accept a 3% down payment from borrowers with excellent credit scores.
  • Bankruptcy – You may qualify for an FHA loan even with a history of bankruptcy for as long as the waiting period has passed. You may apply and get approved for FHA loans two years after your debts were discharged through a Chapter 7 bankruptcy.
  • Additional Requirements for FHA Loans – FHA loans have no income restrictions, but borrowers must demonstrate their capacity to make monthly payments based on their debt-to-income ratio. Local house prices may also influence the amount of funding a lender is ready to provide.

Should You Get an FHA Loan?

FHA loans come with significant benefits for homebuyers. They are:

  1. Easier to qualify for.
  2. Lower down payment.
  3. Lower credit score requirement.
  4. Better interest rates.

Unlike conventional loans, where homebuyers don’t need to pay mortgage insurance if they put down 20% or more of the home’s purchase price, FHA mortgages come with two types of mortgage insurance that you may have to pay for the life of the loan. Still, if you’re looking for a mortgage accessible to lower-income households and people with not-so-ideal credit scores, the FHA loan might just be the loan for you. 

FHA loans can benefit first-time homebuyers who don’t have much saved for a down payment or are still working on improving their credit ratings, but they are not exclusive to a specific demographic. Anybody can get an FHA loan as long as they meet the qualifications. 

Apply for an FHA Loan in Texas with Capital Home Mortgage

With interest rates hovering near all-time lows, now is an excellent time to buy a home. Getting financing is possible with the FHA loan regardless of your credit history or income. 

The FHA loan specialists at Capital Home Mortgage can answer any questions you may have about the program and help you determine whether or not an FHA loan is the most suitable choice. 

For more information about FHA loans and how to qualify, call us at 800-960-4565.

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Texas 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)

Texas 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)

Texas 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.
Not Sure? Take a Look at Other Texas Mortgage Programs

Texas Mortgage Team

Conor Hayhurst

Managing Director
NMLS 743506

Kelly Cameron

Loan Officer
NMLS 178093

Kelvin Thompson

Loan Officer
NMLS 2050042

Jonathon Cummins

Loan Officer
NMLS 270657

Texas Mortgage Company Reviews

What is a 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.