TEXAS FHA LOANS

What are Benefits of  FHA Loans

1. Lower Down Payment: A big advantage to first time home buyers is that a FHA down payment can be as low as 3.5% of the home’s purchase price. This is significantly lower than the 20% often required by lenders for conventional loans.

2. Flexible Credit Requirements: Another advantage is that FHA loans are available to borrowers with lower credit scores.  While conventional loans usually require a higher credit score, at Lone Star Financing we can go down to 600 credit on FHA loans.

3. Competitive Interest Rates: FHA loans at Lone Star Financing come with competitive interest rates, which can reduce your monthly mortgage payment compared to other home loan options.

4. Assumable Loans: FHA loans, are one of the few loan types that are “assumable” meaning that you when you sell your home, the buyer may be able to take over your existing loan under its original terms. This can be a favorable selling point for prospective buyers in Texas.

5. High Loan Limits: FHA loan limits in Texas for 2024 are $498,257, with a maximum of $571,550 for high-cost areas. The limits vary by county and the type of property you’re purchasing. 

What are Texas 2024 FHA Loan Requirements

1. Credit Score: While FHA loans are more lenient than conventional loans, a higher credit score can still improve your chances of approval and result in better loan terms.

2. Down Payment: A minimum down payment of 3.5% of the purchase price or appraised value is required for those with credit scores of 580 or higher. If your credit score is between 500 and 579, a down payment of at least 10% is necessary.

3. Debt-to-Income Ratio: FHA guidelines suggest that your total debt-to-income (DTI) ratio should be no more than 43%. This includes all monthly debts, such as your mortgage payment, credit card bills, and other loans.

4. Property Requirements: The property must be a primary residence and meet certain standards set by the FHA to ensure it is safe and habitable. An FHA-approved appraiser will assess the property.

5. Mortgage Insurance: FHA loans require both an upfront mortgage insurance premium (UFMIP) and monthly mortgage insurance premiums (MIP). This insurance protects the lender in case of default and is a key feature of FHA loans.

Texas FHA Refinance 

* Streamline Option (Rate and Term)
* No Appraisal / No Income
* Full Doc Loans
* Rate and Term / CashOut 
* Closing Costs can be rolled into loan
* Terms: Up to 30 Years
* Purchase financing: up to 96.5% LTV
* Refinance financing: up to 97% LT

Texas FHA refinancing offers homeowners an opportunity to lower their mortgage rates and adjust their loan terms, potentially leading to reduced monthly payments and significant long-term savings. This type of refinancing, backed by the Federal Housing Administration, is especially beneficial for those with existing FHA loans or for first-time refinancers. It provides access to favorable terms with less stringent credit requirements compared to conventional loans. Additionally, refinancing in Texas can help consolidate debt or access home equity, making it a versatile option for improving financial stability and managing housing costs.

Loan Limts for Texas FHA (2024) 

For single-family homes, the 2024 FHA loan limit in Texas is $498,257 but it varies by county. 

The amount of an FHA loan in Texas depends on the price of the home. In the county where the property is located, the median home price must be less than 115% of the home value you wish to purchase.

To qualify you will need to have an FHA appraisal to ensure the property is valued at or above the value you intend to borrow.  

Read More on FHA Loans

Qualifications

FHA loans are intended for first time buyers but you still need to meet the following requirements: 

* Stable employment/income
* The home will be your primary residence
* No foreclosures (last 3 years) 
* 50% or lower DTI ratio
* Minimum 3.5% down payment

* Money to cover the upfront mortgage insurance premium (UPMIP). 

* Money to cover closing costs, which could be anywhere from 2 – 6% of the purchase price.

Things to know about FHA Loans

1. Pre-Qualification: Start by getting pre-qualified for an FHA loan. This involves providing basic financial information to a lender to determine how much you might be eligible to borrow.

2. Documentation: Gather necessary documentation, including proof of income, credit history, and employment verification. This information helps the lender assess your financial stability.

3. Application Process: Complete the FHA loan application with your chosen lender. They will review your financial documents, credit report, and property details to determine your eligibility.

4. Home Inspection and Appraisal: Schedule a home inspection and appraisal. The FHA requires an appraisal to ensure the property’s value supports the loan amount and meets safety standards.

5. Loan Approval: Once your loan is approved, you’ll proceed to closing. During closing, you’ll review and sign final loan documents, and the mortgage will be funded.