FHA Loans Are an Affordable 2023 Mortgage Option
There is no one-size-fits-all home loan option, but for those who need a low down payment and want to save more money upfront on the mortgage, an FHA home loan may be needed.
And it’s not just the existing structure of FHA single-family loans that makes them an option worth looking into. The FHA and HUD have ongoing efforts to make these loans more affordable and accessible to typical borrowers.
When was the last time you heard of a conventional lender actively trying to make their mortgages more affordable? Looking at the changes to the FHA loan program below (implemented between 2021 and the present) it’s easy to see that FHA loans are evolving to keep up with the times.
FHA Loans: Lower Mortgage Insurance Premiums
A recent change in 2023 FHA loan rules makes the loan more affordable thanks to a reduction in FHA loan mortgage insurance premiums.
The FHA and HUD took action in early 2023 that, according to the HUD official site, “will help low- and moderate-income Americans save an estimated $600 million in the next year alone, and many billions over the next decade” where mortgage insurance premiums are concerned.
Positive Rental History Considerations
In 2022, the FHA and HUD altered FHA loan policies to make it easier for first-time home buyers to be approved for mortgages. The agencies did this by allowing qualifying borrowers to have their positive rental history considered as a credit-qualifying factor.
According to HUD, doing this, “makes FHA’s credit evaluation more comprehensive and equitable and supports expanded access to homeownership for first-time homebuyers transitioning from renting.”
Student Loan Debt Calculations
In 2021, the FHA updated student loan monthly payment calculations used to determine FHA debt-to-income ratios for applicants still paying for college. They did so, “to remove barriers and provide more access to affordable single-family FHA-insured mortgage financing for creditworthy individuals with student loan debt.”
As you can see, there are a number of recent, proactive steps taken by both the FHA and HUD to make the FHA loan program more accessible and affordable for typical applicants.
If you aren’t sure how the changes above make FHA loans easier to apply for, ask a participating lender to explain the recent changes and how they may affect the application process for you when the time is right.
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