Understanding the Basics of an FHA Mortgage

Purchasing a home is a big decision. Sometimes it is challenging to understand what mortgage loan options you may qualify for and how it works. Vanderbilt offers a variety of loan programs, including FHA home loans. An FHA loan could be a great option for first-time homebuyers.* As with all loan programs, FHA home loan are subject to credit approval.

What is an FHA mortgage?

FHA Mortgage Basics


An 
FHA home loan is a mortgage insured by the Federal Housing Administration. An FHA loan allows for a
lower down payment requirement than a typical conventional loan which may
benefit the borrower depending on their financial circumstances.



selecting a home loan

FHA Loan Features

 

  • Low down payments
  • Low closing costs
  • Allows lower credit scores than most conventional loans
  • Mortgage Insurance required
  • FHA Home Inspection required

 

Some of the factors that are considered by lenders when assessing if you qualify for an FHA loan include your FICO score, income and debts.

 

FHA loan programs often offer lower down payment requirements, which may be as low as 3.5% of the loan. Down payment requirements may vary, so make sure you ask about it when you talk to lenders.

 

If you have low or unestablished credit, you may still be eligible for an FHA loan. Talk with a Vanderbilt Mortgage loan specialist, an FHA approved lender, about what loan options may be available to you.

 

What are some of the required documents for an FHA loan?

home loan calculator

If you are conditionally approved, you are ready to start the FHA loan process! Be prepared to provide the following information to your loan specialist when you apply for an FHA loan:

-          Credit information (most recent bank statements)
-          Your Employer information from the past two years
-          W2s from the past two years
-          Income Tax Returns for the last two years
-          Social Security Number
-          Verification of funds that will be used for down payment
-          Others necessary information

Additional information may be needed, but having this information ready will help you get started.

Just as a reminder, there are some fees you might forget about when you start shopping for a loan.  Be sure to ask what fees may apply to your loan which can include FHA mortgage insuranceappraisals, inspections, credit reports, and documentation preparation fees for other aspects of the home loan process. Also, make sure the lender you choose provides you with a list of fees you are expected to pay and when they will be due so there are no surprises during your loan process.  

Not ready to apply for a loan just yet? Check out our Guide for Homebuyers to learn more about the manufactured home loan process, see tips for first-time homebuyers and more!

download the guide

*All loan programs are subject to credit approval. 

1"Let FHA Loans Help You." HUD.gov. Accessed March 08, 2018. https://www.hud.gov/buying/loans.

2"FHA Loans." Consumer Financial Protection Bureau. Accessed April 27, 2018. https://www.consumerfinance.gov/owning-a-home/loan-options/fha-loans/.