The primary goal of the Federal Housing Administration (FHA) is to improve the housing market and to protect lenders in the event a borrower was to default on their mortgage. The FHA was created as part of the National Housing Act of 1934 and later became part of the Department of Housing and Urban Development (HUD) in 1965. The FHA has grown to become the largest insurer of mortgages in the world, having insured over 34 million mortgages during the past 80 years. 1st Capital Mortgage, LLC is proud to offer great rates and flexible financing options on Oklahoma City FHA Loans.
An Oklahoma City FHA Loan can be used for a number of different purposes including purchasing a new home, refinancing an existing mortgage, special renovation projects, and reverse mortgages. Cash-out refinance options are available to buyers in need of cash for things such as home repairs or debt consolidation, while streamline refinance loans are available to reduce interest on current loans.
FHA loans offer relaxed credit requirements and low down payment options making them rather easy to qualify for. Buyers could qualify for an FHA loan with a down payment of only 3.5 percent of the purchase price and a credit score of 580. Even if a buyer does not have adequate savings to cover the down payment, Family members are able to gift the money. Given the ease of qualification, FHA loans tend to be very popular among first time homebuyers in Oklahoma City.
Oklahoma City FHA Loan Requirements
- Credit Score – Typically, the minimum credit score required is 580 however, borrowers with a credit score between 500 – 579 could potentially qualify with a 10 percent down payment.
- Income Requirements – A debt-to-income ratio of 43 percent or less is generally required. A debt-to-income ratio as high as 50 percent could be approved in unique circumstances.
- Down Payment – A down payment of 3.5 percent of the purchase price is the minimum down payment allowed. As noted above, if a buyer’s credit score does not support this, a down payment of 10% may be required.
- Property Requirements – All properties purchased through the FHA loan program must meet certain safety, security, and soundness (structural integrity) requirements set forth by the FHA.
There are two different mortgage insurance premiums (MIP) that are required with all Oklahoma City FHA loans. The first is an up-front premium of 1.75 percent of the purchase price. Buyers will have the option to pay this at closing or to roll the premium into the mortgage. The second is a monthly insurance premium. This monthly premium will fall between .80 percent and 1.05 percent and will be based on a number of factors including loan-to value-ratio, loan amount, and the length of the mortgage.
Oklahoma City FHA Loan Limits
Maximum FHA loan amounts are limited by county.
At 1st Capital Mortgage, LLC we are committed to helping our clients with all of their Oklahoma City FHA loan needs. Whether you are purchasing your very first home, or looking to refinance your current FHA loan at a lower rate, we can help. Contact us today with any questions you may have on Oklahoma City FHA loans or to get pre-qualified!