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Fort Worth FHA Home Loans

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FHA Loans In Fort Worth

Fort Worth is the fifth-largest city in Texas and the thirteenth-largest city in the United States. The Fort Worth real estate market is highly competitive. Fort Worth has the highest percentage rise in median house sale price in the country, up over 30% from the previous year. The typical DFW home sales price increased 29.3 percent in June to $426,000 from $329,500 in June 2021.

What is an FHA Loan?

The federal government insures FHA loans. The Department of Housing and Urban Development (HUD) oversees the FHA program. FHA home loans have lower minimum credit scores and down payments than conventional loans, making them particularly appealing to first-time homeowners.

How does an FHA Loan Work?

FHA-approved lenders offer FHA home loans, not by the Federal Housing Administration. FHA mortgage insurance protects lenders against losses. If a property owner defaults on their mortgage, FHA will pay a claim to the lender for the unpaid principal balance. Lenders can offer homebuyers more mortgages by FHA insuring the loan against the borrower’s future default.

FHA loans come in 15-year and 30-year terms with fixed interest rates. The agency’s flexible underwriting standards are designed to help give borrowers who might not qualify for private mortgages a chance to become homeowners.

Most mortgage loans available today have a maximum or limit for borrowers. This is true for traditional mortgage loans and government-backed programs such as FHA. Borrowers who want to use a specific home loan program must keep under these boundaries with a few exceptions.

FHA Loan Requirements

  • Credit

FHA loans require a credit score of 580 to qualify for a 3.5% down payment. However, borrowers with FICO scores under 580 and down to 500 may still be eligible, provided they come up with a 10% down payment, and certain restrictions will apply. They must have a solid compensating factor to compensate for the lack of credit.

  • Income

The borrower’s ability to pay the loan back determines their affordability. The maximum allowable DTI for FHA loans is 57 percent and is evaluated case-by-case depending on compensatory factors.

  • Assets

Borrowers with credit scores over 580 are eligible for a 3.5% down payment. They must be able to source the funds for closing on the loan. If a family member or relative is giving them “gift funds,” the donor must also provide a paper trail on where the money is coming from along with a gift letter from the donor.

After exhausting their funds for the purchase, borrowers must be able to show reserves. Reserves, or liquid financial assets, are readily convertible to cash. All borrowers must show reserves after closing on their home loan. The higher their reserves, the better their likelihood of getting approved for a home loan.

Apply for an FHA Loan in Fort Worth

It’s your turn now! Speak with our FHA Mortgage Consultant for personalized advice and assistance with FHA loans. Call 817-779-7133 to get started.

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Fort Worth 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)

Fort Worth 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)

Fort Worth 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 Purchase Transactions, Max Loan Amount is lesser of:

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

On Refinance Transactions, Max Loan Amount 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 including site-condos)

Eligible Properties

(Owner-Occupied Only):

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

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 Full 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.
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Fort Worth 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

Fort Worth 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.