An Introduction to FHA Loan Financing

Are you interested in purchasing a home but fear you may not qualify for a conventional mortgage? An FHA loan is a government-backed loan option that is a great fit for certain clients. While they are insured through the government, FHA loans are fully funded through private lenders like Nickel City Funding. Our qualified mortgage experts can quickly determine if you are eligible for an FHA loan and provide fast approval. Contact us to talk specifics about your finances and your goals as a homeowner today. We work with all residents of New York.

FHA Loan Origins

FHA loans were created by the Federal Housing Administration, a department of the U.S. federal government. They are one of several types of nonconventional loans, that is, loans that are insured through the federal government. The FHA insures these loans to encourage lenders to provide funding to a greater range of applications who may otherwise not be able to buy a home. Because the government reimburses FHA loans if a borrower defaults, lenders can accept clients with less-than-great credit history with smaller down payments.

Other types of nonconventional loans include USDA loans (through the U.S. Department of Agriculture), and VA loans (through the U.S. Department of Veterans Affairs. Each of these is partially regulated and insured through the federal government and, thus, are subject to approval requirements that we can discuss with you further.

FHA Loan Basics and Requirements

While the FHA does not directly fund FHA mortgages, it does provide some regulation over the loans which it insures. The basics of FHA loans include:

  • Down payments as low as 3.5% down (for people with a credit score of 580 or higher)
  • Down payments with as low as 10% down (for people with a credit score of 500-579)
  • Down payments and closing costs can be paid using a gift to the borrower
  • A required mortgage insurance premium must be paid up front and ongoing monthly premiums must be paid to help fund the FHA loan program
  • No penalties for prepayment of FHA loans
  • Can be used on single and multifamily homes as well as for certain FHA-approved condos and manufactured (trailer) homes
  • Up to 6% seller concessions, which means the buyer can finance up 6% of the purchase price to pay towards closing costs and prepaids

If you live in Niagara or Erie counties in New York, loan limits for FHA mortgages are:

  • $472,030 for a single-family home
  • $604,400 for a two-family home
  • $730,525 for a triple-family home
  • $907,900 for a four-family home

The Nickel City Funding pros also offer FHA refinancing. Whether you have an existing conventional loan or have already obtained an FHA loan and want a better rate, we can help.

Selecting the Right Loan for You

We treat each of our FHA mortgage clients with one-on-one care, and we take the time to ensure they have fully explored different financing solutions. If and FHA loan sounds like the right solution for you and your family, contact Nickel City Funding to schedule a consultation. Let's get started today.

Seller Concessions

FHA allows up to 6% seller concessions, which means the buyer can finance up 6% of the purchase price to pay towards closing costs and prepaids