FHA Home Loans In Spokane Washington

Have you ever contemplated purchasing a Spokane home? Are you concerned about your credit score? Do you need more funds? Spokane FHA loans could pave the way for you to realize your desire for home ownership. 

What is an FHA Loan?

A Federal Housing Administration (FHA) loan is a mortgage insured by the federal government and issued by an agency-approved bank or other lender. FHA loans require a lower minimum down payment than conventional loans, and applicants’ credit scores may be lower than is typically required. The FHA loan is intended to assist families with low to moderate incomes to become homeowners. They are especially well-liked among first-time buyers.

How Does an FHA Loan Work?

The FHA doesn’t give money for a mortgage. A bank or other financial company provides the loan that the FHA approves. That makes bank approval easier since the bank doesn’t have to worry about the loan going bad. Some people call it an FHA-insured loan.

What are FHA Loan Requirements?

Several criteria must be satisfied to qualify for an FHA loan in Spokane, Washington. Your lender will evaluate your qualifications for an FHA loan as it would for any other mortgage applicant, beginning with a verification that you have a valid Social Security number, are a legal resident of the United States, and are of legal age (according to state law).

• Credit Score and Down Payment

FHA loans are especially popular with first-time home buyers because they require as little as a 3.5% down payment for borrowers with credit scores of 580 or higher. Borrowers with a credit score between 500 and 579 can still qualify for an FHA loan, but a 10% down payment is required.

• Debt-to-Income (DTI) Ratio

FHA has established front-end DTI ratio requirements of 31% for housing-related debt and back-end DTI ratio requirements of 43% for total debt. This means up to 31% of a person’s income may be used for housing expenses, and up to 43% may be used to pay off all debts. However, these are general guidelines, and there may be exceptions in certain situations. In certain instances, lenders may permit a DTI ratio of up to 50% if compensating factors are present, such as a high credit score or substantial cash reserves.

• Primary Residence

You must use the property as your primary residence. Second homes and investment properties are not allowed.

• Income and Employment

Borrowers must have a steady income and a two-year verifiable employment history.

• Property Standards

An FHA-approved appraiser must evaluate the house and meet specific property standards. An inspection is required for an FHA loan.

• Loan Limits

Spokane’s FHA loan limits for 2023 are $472,030 for single-family homes, $604,400 for duplexes, $703,525 for triplexes, and $907,900 for four-family dwellings. Commercial properties with more than four units do not qualify for FHA financing. The borrower must occupy one of the units within 60 days of closing on the loan.

FHA Mortgage Insurance Premium

You must pay two types of mortgage insurance premiums (MIPs) with an FHA loan: an upfront MIP and an annual MIP paid monthly. The upfront MIP in 2023 is 1.75% of the base loan amount. The upfront MIP can be paid when closing or rolled into the loan. The yearly MIP is 0.55%, a significant drop from 0.85% last year.

Apply for a Spokane FHA Loan with Capital Home Mortgage Spokane

Due to their extensive understanding of the mortgage application process and the multiple benefits they provide, Capital Home Mortgage is a top choice for Spokane homebuyers looking for an FHA loan. Capital Home Mortgage provides first-time homebuyers with affordable interest rates, potentially saving them money over time. Capital Home Mortgage’s professional service, paired with the benefits of an FHA loan, makes it an excellent choice for Spokane homebuyers.

Call (509) 413-0502 to speak with one of our Spokane FHA Loan Specialists about your mortgage needs.