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FHA & VHDA Loans

From lower down payment and credit score minimums, to the ability to use multiple down payment sources and have a non-occupant co-signer on the loan, an FHA Loan may be perfect for you if you don’t meet the requirements for a regular home loan.

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The Federal Housing Administration was created in 1934 to help more Americans realize the dream of home ownership through loan insurance programs. Today, FHA Loans are still a popular choice among first-time buyers and people who want to become homeowners again.

How do FHA Loans Work?

The U.S. Department of Housing and Urban Development (HUD) doesn’t issue loans directly. Instead, it offers FHA Mortgage Insurance to approved lenders. The lender makes FHA loans that meet certain requirements. If a homeowner defaults on an FHA loan, the lender can file a claim with HUD and receive reimbursement.

Another feature of FHA Loans is the Mortgage Insurance Premium (MIP). As with conventional loans, the borrower must pay for mortgage insurance when the down payment is less than 20 percent. With FHA Loans, you can either pay the entire MIP at closing or in twelve annual installments. You can also get a “seller’s assist” with closing costs to minimize the overall amount due at closing.

Eligibility Requirements for FHA Loans

Anyone can apply for an FHA Loan--they are not exclusive to first-time buyers. The only limitation is that you cannot have more than one active FHA mortgage at a time. That said, FHA Loans can be particularly attractive to first-time buyers because of the low down payment and other flexibility. They are also helpful for people who have a bankruptcy or foreclosure on their credit history, as well as the self-employed and others whose overall financial picture is not the “cookie-cutter” record banks are looking for in traditional mortgage applicants.

VHDA Loans

In addition to federally insured mortgage loans, Virginia’s Housing Development Authority offers loan programs for first-time buyers as well as those looking to buy homes in Areas of Economic Opportunity.  As a VHDA approved lender, TFB can help you get pre-qualified for a VHDA loan and assist you throughout the application process.

*All loans are subject to credit approval.

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