FHA Loans Killeen, TX
If you are looking for an affordable loan program to finance your next home, an FHA loan may be the perfect loan program for you!
FHA Loans are a great option for many homeowners as they typically allow for lower credit scores and only require 3.5% down.
I am based in Killeen, TX but I am licensed to originate FHA Loans in all of Texas, Arizona, Montana, Minnesota, and North Dakota.
What Are FHA Loans?
FHA loans are insured by the Federal Housing Administration. This means that the FHA provides protection to lenders in case borrowers default on their loans.
Because the lenders have less risk with FHA loans, they are able to offer lower interest rates, lower down payments, and more flexible credit requirements compared to conventional loans.
Eligibility Requirements for FHA Loans
FHA loans have different requirements than other loan programs. In general, the FHA loan eligibility requirements include:
- Credit score 580 or higher: 3.5% Down payment.
- Credit score below 580: You may still be able to qualify for an FHA loan, but will typically need to put at least 10% down.
- Debt-to-income ratio (DTI) needs to be at 43% or less, though exceptions can be made.
- Steady documented employment history and proof of income.
FHA Loan Limits in Killeen, TX
The FHA sets loan limits for each county in the United States. These limits determine the maximum amount that borrowers can borrow using an FHA loan. In Killeen, TX, the FHA loan limits for 2023 are:
- One-unit home: $472,030
- Two-unit home: $604,400
- Three-unit home: $730,525
- Four-unit home: $907,900
The FHA Loan Process
I know that getting a home loan can seem complicated and stressful, however the FHA loan process is fairly simple!
Pre-approval: Before you even think about looking at houses or making any offers you will need to get pre-approved for an FHA loan. This involves submitting an application and providing proof of income and employment.
House hunting: Once you are pre-approved, you can start looking for a home that fits your budget and needs.
Making an offer: Once you find the home you love, your agent will make an offer to the seller. I will also reach out to the listing agent to make sure they know you are a solid buyer and pre-qualified.
Inspection: All FHA loans are required to have a home inspection to make sure there are no major issues.
Closing: If the inspection goes well and the seller accepts your offer, you will need to close on the loan. This involves signing the final paperwork and paying closing costs.
Pros and Cons of FHA Loans
FHA loans are one of the best loan programs out there for many reasons. But just like all loan programs, there are pros and cons to getting an FHA loan.
FHA Loan Pros:
- Requires only 3.5% down in most cases.
- More lenient credit requirements, you can get approved with a score down to 500!
- Because FHA loans are insured, lenders can offer lower rates on these loans.
FHA Loans Cons:
- FHA loans require monthly mortgage insurance, no matter how much you put down.
- FHA loans have lower limits than conventional loan programs.
- FHA loans have certain requirements on the types of properties that can be financed. For example, the property must be your primary residence and meet certain safety and livability standards.
It’s my job to help match you with the right loan program for your situation, but I think it’s important for the borrower to also know the pros and cons of an FHA loan upfront.
Is an FHA Loan Right For You?
Now that you know more about FHA loans, you may be wondering if this type of loan is right for you. Here are some factors to consider:
- Do you have a steady income and employment history?
- Do you have a credit score of at least 580?
- Are you comfortable with the mortgage insurance premiums that come with an FHA loan?
- Are you planning on living in the home for at least a few years?
If you answered yes to these questions, an FHA loan may be a good option for you. As I mentioned above, I am always here to help you figure out which loan program may be best for your individual situation.
Ready To Get Started?
As a mortgage broker based in Killeen, TX, I am here to help you navigate through your home buying experience. FHA loans can be an amazing loan program to finance the purchase your dream home.
Reach out to me today for a free consultation to learn more about your options and talk about the pre-approval process.