FHA Mortgages
FHA home loans are an ideal way to qualify for a mortgage with low down payments and credit scores if you’re a first-time homebuyer or have a unique financial credit history.
What is a FHA Loan?
FHA mortgages are insured by the Federal Housing Administration (FHA) and are popular among first-time homebuyers or those with financial challenges. While these are government loans, they are underwritten and serviced by the majority of mortgage lenders.
Benefits of Applying for a FHA Loan
FHA loans in Michigan require lower down payments and credit scores than other loan options, so they’re a great mortgage option if you need the flexibility to qualify. Here are a few additional benefits:
- Consistent monthly payments through the life of the loan
- More lenient credit histories and higher debt-to-income (DTI) requirements
- Lower interest rates than other loan programs
- Shorter time constraints after adverse credit events
- Lenient gift fund rules
- Accepts non-occupant co-borrowers
- 15-year and 30-year fixed terms
Get Approved for a FHA Loan
Relaxed qualifying standards
Option for no down payment
Option for no closing costs
Help available for getting Certificate of Eligibility
Qualifying for a FHA Mortgage
Whether you’re a first-time homebuyer or unsure if you even qualify for a mortgage, an FHA loan could be the answer. Here’s how to qualify:
- Downpayment as low as 3% on your primary residence
- A credit score of 580+
- Verifiable employment history for the last two years
- Verifiable income through bank statements, tax returns, and pay stubs
- Appraised by an FHA-approved appraisal to meet HUD standards
While the qualifications are flexible, those with an FHA loan must pay private mortgage insurance (PMI), mortgage insurance premiums (MIPs), and adhere to more strict inspection standards. Our experienced team of loan officers will walk you through these items to ensure you’re confident with your home loan.
Is a VA Loan Right for You?
These answers to home buyer’s commonly asked questions may help guide you. To take the next step, our loan officers can help you choose the most affordable loan for your home.
Am I eligible for a VA Loan?
VA loan eligibility is service-based. Some contributing factors taken into consideration include:
- Your service status, e.g., active duty, separation
- Your years of service, and
- Your service record
The VA provides detailed eligibility guidelines outlining who qualifies for veteran’s benefits. You may meet eligibility requirements if you are:
- A current active duty military service member,
- A military veteran, or
- The spouse (including surviving spouse) of a service member
Eligibility is proven through a Certificate of Eligibility (CoE) from the U.S. Department of Veterans Affairs. It’s not required to apply for a loan but will be needed before approval. We can help you apply for a CoE or you can apply for it directly through the VA’s benefits portal online or by mail.
How much does the VA funding fee cost?
The amount of the one-time VA funding fee varies depending on your situation, such as your down payment amount and whether this is your first VA loan. For a VA purchase loan, the fee can range between 1.4% to 3.6% of your loan’s value. If you choose to later refinance your VA mortgage, the VA Interest Rate Reduction Refinance Loan has a fee of only 0.5%.
There are exceptions to paying the funding fee, including Purple Heart recipients, certain surviving spouses of veterans, and veterans with service-related disabilities. It can also be paid upfront or rolled into your loan to be paid over time.
Can I use VA benefits to purchase a home more than once?
You’ve earned these VA mortgage benefits and they are available to you as long as you meet the eligibility criteria. You may qualify for a VA loan for your first home purchase and may then qualify again for each home you buy in the future.
You can even use your CoE to qualify for two VA mortgage loans at one time. Your full eligibility is completely restored after a VA loan is paid off or sold.
There are also convenient and affordable options to refinance a current VA loan to help make your home expenses more affordable by getting a lower interest rate or adjusting mortgage terms.
What are the minimum property standards a home must meet for a VA loan?
The VA sets minimum property standards that each home must meet to ensure that the property is a good investment for the home buyer, the lender, and the VA. To determine if a home meets these standards, an inspection will be required.
These standards ensure that the home is safe, structurally sound, and sanitary
Factors considered could include the condition of a house’s roof, electrical, and heating, for example, but do not include cosmetic features.
Is there a maximum amount I can borrow with a VA loan?
The VA does not have a specified loan limit. At River City, you can borrow as much as you can otherwise qualify to purchase. If you would prefer the option for no down payment, the maximum loan amount for 100% in most areas is up to $548,250. You could potentially borrow more with no money down in a higher-cost area.
