FHA Home Loans in Virginia
Do you think the typical mortgage lending process sucks? We do too. That’s why at Dash Home Loans, we make getting approved for an FHA home loan in Virginia fast and easy.
FHA loans are guaranteed by the Federal Housing Administration and are great for low- to moderate-income homebuyers with below-average credit scores. If you’re worried about qualifying for a conventional loan, an FHA loan could be the right financing tool for you.Apply for an FHA loan
- What Is an FHA Loan?
- FHA Loan Requirements
- Types of FHA Loans
- FHA Loans vs Conventional Loans
- Benefits & Disadvantages of FHA Loans
- The Dash Home Loans Process
What Is an FHA Loan?
An FHA loan is a type of government-backed mortgage that makes homeownership more achievable for borrowers with a poor credit history or limited savings.
Unlike conventional loans, which are offered by private lenders like banks and credit unions, FHA loans are federally insured. That means lenders are protected should a borrower default. Since FHA loan qualifications are not as strict as other mortgage loans, even families with FICO scores below 580 may receive FHA financing.
FHA Loan Requirements in Virginia
To receive an FHA loan in Virginia, you must meet FHA loan requirements. In Virginia, these requirements are:
- A credit score of at least 580. If you have a FICO score in the 500 to 579 range, you may still qualify for an FHA loan. However, you will be expected to put 10% down.
- Putting at least 3.5% down. To receive an FHA loan, you must have the cash to make a down payment that is at least 3.5% of the home’s sale price.
- Choosing a home with a 15-year or 30-year term.
- Purchasing mortgage insurance. The annual premium will vary depending on your loan amount and term.
- A debt-to-income ratio less than 57% in some circumstances.
- A housing ratio of 31% or less. This is calculated by dividing the sum of all property expenses by pretax income.
Still unsure if you qualify for an FHA loan in Virginia? Reach out online, and we’ll connect you with a Mortgage Coach.
Income Requirements for FHA Loans
Borrowers often confuse FHA loans with USDA loans, another type of government-backed mortgage. Unlike USDA loans, however, there are no minimum or maximum income requirements with FHA loans. That means an FHA loan could be the right option for you, no matter your salary.
But it is important to keep in mind that FHA lenders do consider your debt-to-income ratio. The debt-to-come ratio is calculated by dividing your total monthly debt payments by your monthly gross income.
To qualify for an FHA loan in Virginia, this figure must generally be less than 57%. Lenders also must see that your housing ratio is 31% or less. The housing ratio measures what percentage of your pre-tax income will go to housing-related expenses like principle, interest, taxes, and PMI.
Types of FHA Loans for Virginia Homebuyers
There are many different types of FHA loans, each designed with a borrower’s unique needs in mind. Take a look at the FHA loans we offer, then get in touch to contact a Mortgage Coach. Your Mortgage Coach is like a home lending encyclopedia. They can answer any burning questions you may have about FHA loans in Virginia and match you with the perfect loan option.
- Fixed-Rate Loan: The traditional FHA loan option with fixed interest rates.
- Adjustable-Rate Loan: Made for homebuyers who want lower introductory monthly payments.
- Manufactured Home Loan: Financing for a mobile home, often with a shorter loan term.
- FHA 203b Loan: A loan designed for buyers who are purchasing a condominium.
- FHA 203k Dream Loan: Gives you the funds you need to purchase a house and make necessary renovations.
- FHA 245a Loan: Assists homebuyers who expect their income to rise.
- Energy-Efficient Mortgage (EEM): The FHA’s EEM program finances energy-efficient home improvements.
- Home Equity Conversion Mortgage (HECM): A reverse loan available to borrowers 62 and older who have equity in their homes.
FHA Loan vs Conventional Loan: Which Is Right for You?
Many borrowers wrongly assume that FHA loans are for first-time homebuyers while conventional loans are designed for seasoned real estate gurus. But that’s just not the case.
When you meet with your Mortgage Coach at Dash Home Loans, we’ll walk you through more than a dozen types of mortgage lending options. We’ll weigh the pros and cons of FHA loans compared to conventional loans, determining the right fit for your financial situation. Though your Mortgage Coach will provide more detailed insight, here are some key differences between FHA loans and conventional loans:
- The minimum credit score for an FHA loan is 500. That jumps up to 620 for a conventional loan.
- FHA loans require at least 3.5% down. Some conventional mortgages allow borrowers to put just 3% down, though you must have a high FICO score and ample savings.
- FHA lenders allow buyers to have a higher debt-to-income ratio than private lenders.
- You must purchase mortgage insurance with an FHA loan. Conventional loans only require PMI if the down payment is less than 20%.
- FHA loan terms are 15 or 30 years. Conventional loans offer 10-, 15-, 20-, and 30-year loans.
- FHA appraisals are more stringent than conventional appraisals. The home you’re purchasing with an FHA loan must also be a primary residence; it cannot be used as a vacation home or income property.
Benefits & Disadvantages of FHA Loans
FHA loans can be a convenient and achievable lending option for many homebuyers. Compared to conventional mortgages, this financing tool allows for lower credit scores, lower down payments, and even higher debt-to-income ratios. Since conventional loan terms are decided by private mortgage lenders, these standards are hard for low- to moderate-income borrowers to achieve.
Of course, there are downfalls to FHA loans. Chiefly, FHA loans require that you purchase mortgage insurance. Annual mortgage insurance premiums range from 0.45% to 1.05% of your original loan amount. That can add up.
An FHA loan is probably a good fit if:
- You have the cash to afford the FHA minimum down payment
- Your credit score is less-than-perfect
- You have a higher debt-to-income ratio
Though an FHA loan can make homeownership a reality for certain families, it’s not the right loan for everyone. Feel free to explore other types of home loans.
The Dash Home Loans Process
Getting a home loan is normally a slow-moving nightmare. But when you work with Dash, Virginia’s most efficient mortgage lender, closing on your new home is a dream.
So what’s the difference between us and them (i.e. big banks)? We cut out loan processors, thereby simplifying the lending process. Plus, unlike other loan officers, our Mortgage Coaches care about you and your family. They’ll work tirelessly to ensure that you meet all FHA loan requirements and that you’ve completed the necessary paperwork. They’re also your number one advocate when underwriters start reviewing your application.
But wait, what happens if you don’t qualify for an FHA loan? That’s just fine. Since we offer more than a dozen types of loans, our Mortgage Coaches are sure to find something that fits your needs.
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Work With Dash for FHA Loans in Virginia
Does applying for an FHA loan in Virginia seem overwhelming? Chill out. When you apply for an FHA loan with Dash Home Loans, our team will walk you through the process. We’ll discuss the ins and outs of each type of FHA loan, the specific qualifications, and which loan options are right for you. We’ll also go hunting for the best rates.
But what if you’re unsure of your budget? No worries. After you apply, we’ll match you with one of our Mortgage Coaches. These mortgage lending gurus will evaluate your financial situation to determine how much house you can afford. If you’re ahead of the game and already have a house in mind, we can also crunch some numbers to provide a ballpark monthly payment.
If you haven’t already picked up on this, Dash does mortgage lending differently. Unlike big banks, we skip all the nonsense and cut to the chase. That means you’ll experience a simpler, more streamlined lending process. Still doubtful? Check out reviews from our previous customers!
Frequently Asked Questions
Get All Your FHA Loan Questions Answered
Still confused by FHA loan requirements? Want to learn more about what makes Dash Home Loans so different? Contact us to speak with one of our knowledgeable Mortgage Coaches.
Do FHA home loans have income limits?
No. Unlike USDA loans, a different kind of government-backed mortgage, FHA home loans have no income minimums or maximums. However, to qualify for an FHA loan, you must have a debt-to-income ratio less than 57% and a housing ratio of 31% or less.
How do FHA loans work?
FHA loans are like conventional loans in that homebuyers borrow from private lenders. However, FHA mortgages are insured by the Federal Housing Administration. That means if a borrower defaults, the FHA will pay a claim to the lender for the unpaid balance. Since this makes FHA loans less risky, lenders are willing to offer loans to lower-income homebuyers with less-than-perfect credit.
What credit score do I need to qualify for an FHA loan?
An FHA loan requires a 580 or higher. You may still qualify if your FICO score is in the 500 to 579 range; however, you will be expected to put 10% down.
What does FHA stand for?
FHA stands for the Federal Housing Administration. This is the government agency that insures FHA loans.
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