FHA

The Federal Housing Administration (“FHA”) provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. This insurance reduces the risk to the lenders because the FHA will pay in the case of a loan default. In turn, lenders are willing to offer loans with a low down payment. The required down payment on a FHA loan is only 3.5% if you have a credit score of 580 or higher. However, be aware that this is the minimum credit score required by FHA but an individual lender providing the FHA loan may require a higher score.  

FHA Loan Pros:

  • Easier to qualify than conventional loan
  • Low down payment
  • Loan can be assumed by the buyer when you sell your house

FHA Loan Cons:

  • The mortgage insurance premiums are normally more expensive than conventional loans.
  • You will continue to pay monthly mortgage insurance premiums for the life of the loan – even after you have built up substantial equity in the home.
  • There is an up-front mortgage insurance premium of 1.75% of the amount of the loan.
  • Relatively low FHA loan limits means FHA loans are not an option for higher priced homes. Currently in Brevard County the maxium FHA mortgage you can get on a single family residence is $275,665.
Loan Limits by FHA.com