The Federal Housing Administration (FHA) loan program was initiated to increase home ownership and improve the housing property market.
The Iowa FHA loan makes it much easier for homebuyers in the state to acquire a residential property at ideal rates, without many concerns about perfect credit scores. FHA backs these loans for buyer benefit, but protects the lenders from potential no-payment fallouts at the same time.
E-Finance Mortgage LLC is committed towards helping home buyers in Iowa achieve FHA loans at great rates. FHA loan possibilities include financing for residential payments, re-financing for renovations and other expenses, and reverse mortgages.
Iowa FHA Loan Requirements
- A minimum credit score of 580 is required to qualify and be eligible for down payment. Potential homebuyers with credit score of over 500 but less than 579 can also apply, but may have to make a down payment of up to 10% of purchase price.
- As low as 3.5% of the purchase price—that is the minimum down payment required—if your credit score is 580 or over. If your credit score is less that 580, the down payment percentage may increase.
- A DTI (debt-to-income) ratio of 43% is another requirement to qualify for the Iowa FHA loan. Up to 50% of DTI ratio may be acceptable in special cases.
- Safety and soundness of property will be determined before loan approval.
Loan limits vary according to the state’s counties. In Iowa, high-cost area property loans amount between $271,000 and $636,500.
FHA loan borrowers in Iowa are required to make two mortgage insurance premiums (MIP) payments:
- 75% of the purchase price – the up-front premium. This payment is auto-added to the overall mortgage amount by the FHA.
- Part mortgage payments per month. These premiums can amount between 0.45% and 1.05% of annual mortgage balance. Various factors determine these MIPs, including loan amount, mortgage length, and the FHA loan-to-value (LTV) ratio.
Iowa FHA Loan Benefits
People looking for first residential purchase in Iowa have much to gain from FHA loans credit score and down payment flexibility. For instance, a first-time homebuyer with a credit score of 580 can qualify for the FHA loan with a down payment of as low as 3.5%.
e-Finance Mortgage also offers cash-out refinancing for current homeowners in Iowa who require additional monetary support for property expenses. We also offer the FHA 203k loan for renewal projects. With this loan option, the borrower can merge purchase and renovation costs into a single mortgage.
At e-Finance Mortgage LLC, we strive to support homebuyers throughout Iowa with FHA loan needs, including financing and refinancing for first-time buyers and current home owners respectively. Contact us today to get your FHA loan qualification assessment started!
