Odessa FHA Home Loans

Those looking to buy a home can do so through various financing options. One of the more popular choices for first-time homebuyers is the FHA loan, which made homeownership easier and more affordable for most Americans.

FHA Home Loans Overview

Since 1934, the Federal Housing Administration (FHA) has assisted American families in securing safe and affordable housing. This commitment to affordable homeownership lives on through the FHA home loan program, which plays a vital role in the nation’s economy.

Although they are called “FHA” loans, the Federal Housing Administration does not create these loans; instead, they insure them against future default. Private lenders issue FHA loans, but the government guarantees repayment in the event of default. This government backing makes it possible for lenders to extend credit to borrowers who might not qualify for a home loan under normal circumstances.

FHA Loan Eligibility Requirements

You must meet the following standards to qualify for an FHA loan in Odessa, Texas: 

• Credit Score 

An FHA loan requires only a 3.5% down payment from borrowers with a credit score of 580 or higher. You can still try to get an FHA loan with a credit score as low as 500, but you’ll need to put down 10% of the purchase price. 

• Down Payment 

While most lenders adhere to the FHA-mandated down payment amount of 3.5%, those with excellent credit may find a lender willing to accept as little as a 3% down payment. 

• Bankruptcy 

Even if you’ve filed for bankruptcy before, you may still be able to get an FHA loan after the required waiting period has elapsed. In the two years following your discharge from bankruptcy under Chapter 7, you’ll be eligible to apply for and receive an FHA loan. 

• Additional Requirements

FHA loans don’t have income limits, but borrowers must show that they can make monthly payments based on their debt-to-income ratio. Local house prices may also affect how much money a lender is willing to offer.

Benefits and Drawbacks of the FHA Loan

FHA loans have a lot of benefits for homebuyers. They are: 

1. Less stringent qualification requirements.
2. Pay less upfront.
3. A lower credit score is needed.
4. Lower interest rates. 

FHA mortgages come with two types of mortgage insurance that you may be required to pay over the life of the loan. This is in contrast to conventional loans, which do not require borrowers to pay mortgage insurance if they put down 20% or more of the home’s purchase price. Nonetheless, the FHA loan may be your loan if you are looking for a mortgage accessible to first-time homebuyers, lower-income households, and individuals with less-than-perfect credit.

The Best FHA Home Loan Offers in Odessa, TX

With an FHA loan, you can get a loan no matter how good or bad your credit or the money you make. Capital Home Mortgage’s FHA loan experts can answer any questions about the program and help you decide if an FHA loan is the best option.  

Call us at (432) 218-4828 to learn about FHA loans and how to get one.