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Summary: There have been many changes to the Federal Housing Administration (FHA) loan program in recent years. To keep Washington State home buyers informed, we have been publishing a series of blog posts about current FHA requirements in 2020.
Today, we will look at FHA down payment guidelines and requirements for Washington State home buyers.
An FHA loan is simply a mortgage loan that is insured by the federal government. The program is managed by the Federal Housing Administration, which falls under the Department of Housing and Urban Development (HUD).
Because these loans are insured, mortgage lenders are able to offer more flexible qualification standards including a lower down payment. The FHA loan program has been operating since the 1930s.
The FHA down payment requirements for Washington State home buyers are fairly straightforward. Borrowers who use this program to buy a house are required to make a minimum investment of 3.5%. That means they can finance up to 96.5% of the home’s purchase price.
The 3.5% down payment option is partly what attracts home buyers to this program. First-time buyers with limited funds saved up for a down payment often use FHA loans as an alternative to conventional mortgage financing.
One of the benefits of using an FHA-insured mortgage loan is that you can obtain down payment gifts from family members, or from other approved donors. This is where another person (or organization) gives you money to cover some or all of your down payment. So it doesn’t necessarily have to come out of your own pocket.
Related: Learn more about down payment gifts
The down payment is just one FHA loan requirement that Washington State home buyers should know about it. This program has other qualification criteria as well.
There are limits to the amount you can borrow when using an FHA loan to buy a house. In Washington State, the FHA loan limit for a single-family home ranges from $331,760 (in most counties) to $741,750 in the more expensive places like the Seattle metro area.
Additionally, borrowers must have a credit score of 580 or higher to qualify for the 3.5% down payment option. This is a risk-management requirement established by HUD.
Will you need mortgage financing to buy a home? If so, we’d love to help. Sammamish Mortgage offers a wide variety of mortgage programs and tools with flexible qualification criteria. We serve the entire state, as well as the broader Pacific Northwest region that includes Oregon, Colorado, and Idaho. Please contact us today with any financing-related questions you have.
Condominium owners and buyers have previously been at a disadvantage when trying to use the Federal Housing Authority (FHA) support to get a home mortgage. Single-family homes could get better FHA mortgage deals than condominiums. In October 2019, this changes.
Summary: Your credit score plays an important role in your ability to secure a mortgage and get a lower rate. So, what is the average credit score for those taking out an FHA loan in Washington and Oregon? We’ll explain…