Podcast - 066: How to buy a home with an FHA loan in 2022?

In this episode, realtor Anthony Luevanos and lender Angel Luevanos break down what an FHA loan is, the minimum requirements, the pros and cons, and who the FHA loan is most importantly suitable for.

The FHA loan, commonly referred to as the first-time home buyer loan, is a great option to purchase a home for those who do not have the best credit or largest downpayment.

What are the minimum requirements to qualify for the FHA loan?

The minimum downpayment is 3.5% for the FHA loan. The credit score is 580, but we recommend a 620 since the interest rate will be better. The maximum FHA debt-to-income ratio is 56.9%. The FHA loan limits in 2022 range from $420,860 in low-cost areas to $9700 in high-cost areas like Los Angeles and Orange County.

What are the pros of the FHA loan?

-Low down payment requirement

-Low credit score requirement

-Better interest rates than conventional

-Can qualify for more

-Can purchase multi-units with 3.5% down

What are the cons of the FHA loan?

-Mortgage Insurance is more expensive

-UFMIP required

-Must refinance to remove mortgage insurance

-Monthly payment tends to be higher than a conventional loan with 5% down

-Must meet more strict property requirements

Overall, the FHA loan is a superb option that will allow you to get into a home sooner than later. And in an appreciating market like we have seen the last ten years, waiting to qualify conventional or to put a larger downpayment can be costly.

This market is tough, and we understand that. So we made a free eBook to help you. “How to get a good deal in a seller’s market” eBook