The Federal Housing Administration’s (FHA) main goal is to move the housing market and protect the lenders if a borrower defaults on the mortgage. The FHA was created as part of the National Housing Act and later became part of the Department of Housing and Urban Development (HUD). The FHA has grown to become the largest insurer of mortgages in Texas. Nortex Mortgage is committed to offering great rates and flexible financing options on FHA loans in Plano, McKinney, Frisco, and Texas. Contact a Nortex Mortgage loan officer today at (972) 867-5626 for a free consultation.
FHA Loans Benefits
FHA Loans in Texas can purchase a new home, do renovation projects, reverse mortgages, and even refinance an existing mortgage. Cash-Out refinance options are available to borrowers needing capital for debt consolidation or repairs. Streamline refinance loans are available to reduce interest on your current loan.
FHA Loans in Texas offer relaxed credit requirements and lower down payment options to make it easier to qualify for than other loans. Buyers could potentially be eligible for an FHA loan with a down payment of only 3.5% of the purchase price and a credit score of 600. If a buyer does not have adequate savings to cover the down payment, family members can gift the money. Since these loans are easier to qualify for, FHA loans are very popular among first-time home buyers in Plano, McKinney, Frisco, and Texas.
Texas FHA Loan Requirements
- Down Payment Requirement: A down payment of 3.5% of the purchase price is the minimum allowed. A higher down payment may be required if a buyer’s credit score does not support this.
- Income Requirements: Debt to income ratio of 43% or less is generally required. A higher debt-to-income ratio could be approved in unique situations.
- Credit Score Requirements: Typically, the minimum credit score is 600, although borrowers with a lower one could potentially qualify.
- Property Requirements: All properties purchased through the FHA loan program must meet certain structural integrity and safety requirements.
Collin County Loan Limits
- The Collin County loan limit for a single-family property is $362,250. Nortex Mortgage will research on your behalf if you live in another county.
Working with a Qualified FHA Lender in Texas
At Nortex Mortgage, we are committed to helping our clients with their FHA loan needs in Plano, Frisco, McKinney, and Texas. If you are purchasing your first home or are looking to refinance your current FHA loan to a lower rate, we can help. Contact a Nortex Mortgage loan officer today at (972) 867-5626 with questions about FHA loans in Texas or how to get pre-qualified!
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). FHA is the world’s largest insurer of residential mortgages, insuring tens of millions of properties since 1934. Because FHA loans are self-insured, lenders can offer financing options that otherwise would not be available.
FHA loans are a good option for first-time homebuyers because its one of the most accessible mortgages to qualify for because they require a low downpayment, and you can have less-than-perfect credit.
If you cannot afford a higher downpayment, have a low credit score, or cannot be approved on a conventional loan due to past credit, you should consider whether an FHA loan is the best option.
There are several reasons why an FHA loan may be right for you; it depends largely on your unique situation. Here are some key points that could help you make your decision.
- Sellers are allowed to pay up to 6% of your closing costs.
- Higher debt-to-income ratios are allowed.
- Downpayment can be a gift from a family member.
- Mortgage insurance is required for the life of the loan.
- Non-occupying co-borrowers are allowed.
- Student loan payments are factored into debt-to-income ratios, unlike conventional loans.
- The interest rate is typically lower than those offered on conventional mortgages.
FHA loans offer a wealth of benefits for many home buyers. If you are considering using an FHA loan to buy a home, contact a Nortex Mortgage Loan Officer to get started.