A Comprehensive Guide to San Antonio FHA Loans
FHA loans present themselves as one of the best mortgage options for first-time homebuyers in San Antonio. Some very attractive features of the loan are its low-interest rates, low credit requirement, and affordable 3.5% down payment rate for qualified borrowers.
Read on to know more about San Antonio FHA loans.
FHA Loans, Explained
FHA home loans are mortgages insured by the Federal Housing Administration or FHA – a government agency that sets the standard for home construction and financing in the United States.
When a mortgage is guaranteed or backed by the FHA, it means that the FHA will step in and cover the financial losses of the lender, in part or in full, in the event of a foreclosure. Because of this additional protection provided by the government, FHA mortgages usually have lower interest rates and qualification requirements compared to traditional home loans.
To be eligible for an FHA loan, a borrower must meet several requirements, which includes a credit score of 580 to qualify for the 3.5% down payment rate. If your credit score is somewhere between 500 – 579, you may still get approved for an FHA loan, but you’ll have to put up at least 10% for the down payment.
Different Types of FHA Loans
FHA loans generally come in fixed-rate and adjustable-rate options. Fixed-rate FHA loans maintain the same interest rate for the life of the loan, while adjustable-rate FHA mortgages have fluctuating interest rates.
Aside from these two, however, the FHA program has a selection of home loan products that are more specific to the buyers needs. They are as follows
FHA 203(b) Loans – This is the most common type of loan insured by the FHA. You can use 203(b) loans to purchase properties between 1-4 units or refinance your home.
FHA 203(k) Loans – This type of FHA loan is also called the Rehabilitation Mortgage. Homebuyers and existing homeowners alike can use the 203(k) to pay for eligible home repairs and improvements.
EEM Loans – You can use EEM or Energy Efficient Mortgages to finance home improvements that reduce energy use/consumption in your home.
HECMs – Home Equity Conversion Mortgages or reverse mortgages are for homeowners aged 62 and over who wish to use their home’s equity as a means to supplement their income.
FHA Streamline Refinance – This option allows borrowers to refinance an existing FHA loan to a lower rate more quickly. The refinancing process requires little financial documentation and rarely involves a credit check.
FHA Loan Limits in San Antonio, TX
FHA released new limits at the beginning of 2021. The latest FHA loan limits range from $331,760 in low-cost areas to $765,600 in higher-cost regions in the country.
FHA loans allow one to four living-unit properties, and the loan limits vary based on the number of units in the property. The limits for FHA loans in San Antonio, TX is currently at $403,650 for a single-family unit property to $776,250 for a four-plex.
If you think the FHA loan is the right home option for you, get in touch with an FHA-approved lender near you for guidance on how to get started with the application process.
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