California Loan Options
California FHA Loan
FHA (Federal Housing Administration) loans represent a government-backed mortgage initiative strategically crafted to enhance homeownership accessibility, especially for first-time buyers and individuals with moderate incomes. A distinguishing feature of FHA loans is their notably low down payment requirement, often as minimal as 3.5% of the home’s purchase price. These loans carry an insurance guarantee from the FHA, providing lenders with an added layer of security. This assurance empowers lenders to extend more favorable terms, even to borrowers with credit histories that may be less than perfect.
Moreover, FHA loans cater to diverse financial situations by permitting funds for the down payment to originate from various sources, including gifted funds. Alongside this flexibility, FHA loans frequently feature competitive interest rates, rendering them a popular choice for individuals seeking a more accommodating and accessible financing option as they venture into the housing market.
Some Benefits of an FHA Loan:
Introducing New, Lower Mortgage Insurance Premiums
In 2023, the FHA implemented significant reductions in monthly mortgage insurance premiums, enhancing affordability for borrowers.
Low Down Payment
A minimal down payment requirement of only 3.5% for qualified applicants, making homeownership more accessible.
First Time Home Buyer
While FHA is an excellent choice for first-time home buyers, eligibility is not exclusive to this group. FHA loans are available to anyone and can be utilized for both home purchases and refinancing.
Flexible Underwriting
FHA loans offer a crucial advantage with less stringent credit criteria compared to conventional loans sold to Fannie Mae and Freddie Mac. Additionally, FHA allows for a higher debt-to-income ratio, potentially requiring less income to qualify.
Credit Problems
Individuals with past credit issues or those lacking traditional credit can still secure FHA financing, providing an inclusive option for a broader range of borrowers.
Non-traditional credit
If you lack a conventional credit score, reach out to us today to explore eligibility for non-traditional credit qualification under the FHA program.
Assumable
California FHA loans are assumable, allowing for the transfer of the mortgage to another person without incurring additional costs associated with obtaining a new loan.
Embrace the advantages of California FHA loans, designed to foster accessibility, flexibility, and affordability in your homeownership journey. Contact us to explore how these features can align with your specific needs and financial goals.
2024 FHA Loan Limits for California
| County | 1 Unit Property | 2 Unit Property | 3 Unit Property | 4 Unit Property |
|---|---|---|---|---|
| Kern | $472,030 | $604,400 | $730,525 | $907,900 |
| Nevada | $644,000 | $824,450 | $996,550 | $1,238,500 |
| Orange | $1,089,300 | $1,394,775 | $1,685,850 | $2,095,200 |
| Placer | $763,600 | $977,550 | $1,181,650 | $1,468,500 |
| Riverside | $644,000 | $824,450 | $996,550 | $1,238,500 |
| San Diego | $977,500 | $1,251,400 | $1,512,650 | $1,879,850 |
If your county is not included above, see the complete list of FHA maximum conforming loan limits by county.
Understanding FHA Mortgage Insurance Premiums
The FHA Loan involves both an upfront mortgage insurance premium (UFMIP) and a monthly mortgage insurance premium (MIP), each serving distinct purposes.
Upfront Mortgage Insurance Premium (UFMIP):
- UFMIP is a one-time fee required for FHA-insured loans, acting as insurance coverage for potential losses in case of borrower default.
- Paid at loan closing, it can be made in cash, increasing closing costs, or financed into the loan amount, elevating the overall loan balance.
- Calculated at 1.75% of the loan amount.
- Generally non-refundable, but a portion may be credited toward a new UFMIP if refinancing within a specific timeframe.
Monthly Mortgage Insurance Premium (MIP):
- An ongoing fee paid monthly by borrowers as part of their FHA loan installment.
- Calculated by multiplying the loan amount by an annual MIP rate, then dividing by 12 months. Rates depend on factors such as loan amount, term, and loan-to-value ratio.
- Duration of monthly MIP payment varies; for most FHA loans, it’s paid for the life of the loan, but some may allow cancellation after 11 years.
For the latest and accurate information on FHA Loans, connect with our experienced loan officers by calling 1-866-389-2778. They can provide personalized guidance based on your specific circumstances and keep you informed on the latest updates in FHA lending.
2024 FHA Mortgage Insurance Premiums
Mortgage Term of more than 15 Years
| Base Loan Amount | Loan to Value | MIP (basis points) | Duration |
|---|---|---|---|
| Less than or equal to $726,200 | ≤ 90.00% | 50 bps | 11 years |
| > 90.00% but ≤ 95.00% | 50 bps | Mortgage Term | |
| > 95.00% | 55 bps | Mortgage Term | |
| Greater than $726,200 | ≤ 90.00% | 70 bps | 11 years |
| > 90.00% but ≤ 95.00% | 70 bps | Mortgage Term | |
| > 95.00% | 75 bps | Mortgage Term |
Mortgage Term less than or equal to 15 Years
| Base Loan Amount | Loan to Value | MIP (basis points) | Duration |
|---|---|---|---|
| Less than or equal to $726,200 | ≤ 90.00% | 15 bps | 11 years |
| > 90.00% | 40 bps | Mortgage Term | |
| ≤ 78.00% | 15 bps | 11 years | |
| Greater than $726,200 | > 78.00% but ≤ 90.00% | 40 bps | 11 years |
| > 90.00% | 65 bps | Mortgage Term |
Information and self-help tools are provided for your independent use and are not intended to provide investment advice. We cannot and do not guarantee loan eligibility or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to speak with one of our experienced loan officers for a loan eligibility analysis and custom rate and payment estimate.
