FHA Home Loan Basics

About FHA Home Loans Purchase A Home In North Texas

FHA Home Loan Basics

An FHA home loan is a residential mortgage that is insured by the Federal Housing Administration (FHA). This means the U.S. Government insures the home loan and protects FHA-approved lenders against potential losses should a borrower default on their FHA mortgage home loan. In other words, the lender gets their money back when someone gets foreclosed. The “normal” FHA Home Loan is a 203(b) home loan but there are other types of FHA loans like a 203(k), 203(ks), etc..

FHA 203(b)

Section 203(b) is the centerpiece of FHA as it promotes financing for the purchase or refinance of a new or existing primary residence. FHA is often dubbed a “first time home buyer program” but anyone can apply for an FHA home loan. FHA’s credit guidelines and down payment requirements are typically more flexible than those of conventional loans.

FHA 203(b) Features

  • Only requires 3.5% down (which can come from Gift Funds).
  • Offers various programs (ex: 30 year fixed, 15 year fixed, etc.)
  • Maximum base loan amount is $362,250 in North Texas (see below)
  • Mandates an Escrow Account
  • Allows for 6% Seller Concessions
  • Requires condominiums be approved by HUD (see FHA Eligible Condos)

FHA 203(b) MIP Features

  • Has a 1.75% Up Front MIP that can be rolled into the loan amount
  • Mandatory Annual Mortgage Insurance that is part of the mortgage payment
  • Has specific requirements for the MI Duration
  • Check out FHA Mortgage Insurance for more details

FHA Maximum Loan Limits

The FHA maximum loan limits increased for 2017 in North Texas. Dallas, Collin, Rockwall, and Tarrant counties now have an increased FHA loan limit of $362,250. This means that someone can now purchase a home for $375,388 and qualify with FHA’s minimum down payment of 3.5%. FHA loan limits in 2016 were $334,650, in 2015 they were $310, 500, in 2014 they were $287,500, and prior to that they were $271,050. Below is a complete list of counties in Texas with their 2016 FHA max loan amounts.

Here’s a link to FHA’s County Loan Limit Search so you can lookup the FHA loan limits for any county in America. Enjoy.