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As a first-time homebuyer, you've likely heard of an FHA loan. But what is it and does FHA cover new construction? Our financial expert can help answer all this and more with this FHA Q&A!
What Is an FHA Loan?
The Federal Housing Administration (FHA) insures loans through the Federal Government to assist first-time homebuyers by giving them access to financing without having to make a large down payment.
In addition, FHA loans are easier to qualify for than other mortgage loans. With an FHA loan, a customer does not have to have as strong of a credit rating or as much income as what would be required on other types of mortgage loans.
Can You Use FHA Loans on New Construction? And How Can MIF Help?
Yes, FHA loans can be used for the purchase of new-build homes in addition to existing homes.
M/I Financial offers the full range of government loans, including FHA loans, Veterans Administration (VA) loans, and Rural Housing Loans (USDA). The Loan Officers at M/I Financial specialize in discussing different financing options available for new homes.
What Are Some of the Advantages of FHA Loans? Are There Any Disadvantages?
The advantages of an FHA loan include lower down payments and more flexibility on credit and income. Depending on your credit score, the cost for mortgage insurance that’s required on all loans with less than a 20% down payment can be more or less than other mortgage loan options.
I do not like to think of the differences as disadvantages; that is why it is so important to have a Loan Officer who has knowledge of all the loan programs available for a new home purchase.
I cannot stress enough the importance of working with a lender like M/I Financial that understands the benefits of the many different loan programs available today. The Loan Officer can recommend different loan programs to best suit your needs.
We believe that an informed consumer is the only person truly qualified to make the decision on which loan is best for his or her situation.
Is There Anything Else to Know About Using an FHA Loan on a New-Build Home?
FHA loans are an important and essential loan program, but they aren’t the only option for homebuyers. They were the first government mortgage loan types introduced after the Great Depression and they helped fuel the rise in homeownership over the last 50+ years.
They introduced the 30-year fixed rate mortgage and continue to make innovative enhancements to fulfill the Housing and Urban Developments (HUD) mission of making homeownership available to as many people as possible.
I encourage people to speak with a M/I Financial Loan Officer, as they can help them learn what it takes to be eligible to buy a home now or in the future.
If you’re considering an FHA loan for your new home purchase or still have questions on the different loan types available to you, continue researching the financial aspects of buying a new home or reach out to M/I Financial to speak with a qualified Loan Officer.
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