FHA Questions & Answers-by Munson Realty
FHA Questions & Answers
Let’s face it, not everyone has the traditional 20% to put down on a home or condo these days. More and more Los Angeles first time buyers are turning to FHA to get their foot in the door to homeownership. Here are some answers to frequently asked FHA questions. Have a question we haven’t covered here? Visit First time buyer questions or give us a call at 323-216-9671
What is a FHA Loan?
FHA loans are perfect for applicants who don't have a 20% down payment saved or who need assistance with more flexible qualification requirements. FHA-approved lenders offer FHA loans that are insured by the Federal Housing Administration (FHA). Because FHA loans are designed to help first-time home buyers, there are differences compared to traditional loans. One difference is that income and allowable debt are subject to more flexible loan qualification requirements than a traditional loan, making it easier to qualify for this type of loan. Another difference is that there's
FHA Los Angeles—FAQ #2What is the minimum down payment require by FHA?
First-time home buyers can put as little as 3.5% of the purchase price down for the home.
FHA Los Angeles—FAQ #3What are closing cost?
There are fees in addition to the down payment that must be paid when purchasing a home. These fees are called closing costs. For example, closing costs cover title policies, recording fees, inspections, courier charges, reserves to set up an mortgage impound account, and origination fees that the lender charges. Closing costs can be typically be anywhere from about 2 to 3 percent of the purchase price. By the way, we like to negotiate for our buyers to have the seller pay those closing cost. Don’t be afraid to ask!
FHA Los Angeles—FAQ #4How much of the closing cost can the seller pay?
The seller may contribute or credit up to 6% of the purchase price. Often that amount is calculated and added to the top of your offer. For example: You may want to offer $300K but need closing cost from the seller. You will offer $318K and the seller will credit $18K (6%) towards your closing cost. This gives them their $300K and you your closing cost. Essentially you are financing your closing cost. Or you may offer $300K with and ask for $18K in closing cost. This will net the seller $282K and you will get your closing cost. The seller will be more likely to accept the offer that nets them the most.
FHA Los Angeles—FAQ #5Where or how do I find a FHA approved lender?
To find an FHA and HUD approved lender, check out HUD-approved lenders. Or we will be happy to recommend you a reputable FHA lender. Contact us here or call 323-216-9671
FHA Los Angeles—FAQ #6Do I have to live in the home I purchase with FHA?
Yes. The FHA requires you to occupy the property you purchase.
FHA Los Angeles—FAQ #7Are there certain structural guidelines required by FHA?
Yes. The FHA requires the property you purchase to meet current building standards for energy efficiency. These standards include:
- Ventilation in crawl spaces and attics.
- There must be weather stripping on all windows and doors.
- All outward facing walls and ceilings of the home must be insulated. The air conditioning, heating, and ventilation pipes and ducts must also be insulated.
- All cracks and openings from the interior to the exterior of the home must be sealed.
- Every bedroom must have a smoke detector.
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