September 26, 2020

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Why You Could Buy A First Home With An FHA Mortgage

Why You Could Buy A First Home With An FHA Mortgage

First-time home buyers may not realize the full value of some FHA home loan features, but once you’ve had a bit of experience with real estate and related issues, the FHA loan features that look good to you will do so for important reasons.

FHA home loans have several strengths for those looking for a first home. Do you know what they are?

FHA mortgages allow down payment gifts from approved sources. Your family, friends, co-workers, or agencies with no financial stake in the outcome of the transaction may provide genuine gifts of down payment money.

The seller of the real estate you want to buy can not contribute toward your down payment.

But you CAN negotiate with the seller to get up to six percent of the home’s sale price in closing costs contributed instead. FHA home loans can be offered to first-time borrowers with “thin credit” or a short credit history if alternative credit documentation can be provided.

FHA mortgages are assumable, which means a reduced risk for the borrower. Allowing your loan to be assumed means you can sign over the mortgage to another person and allow them to assume responsibility for the loan.

FHA mortgage loans allow you to finance certain closing costs like the Up Front Mortgage Insurance Premium.

This can save you money out of pocket on the loan-combine this with the previously mentioned down payment assistance and seller contributions and you have a fairly decent portion of your up front expenses accounted for in your mortgage transaction.

One of the big down-the-road advantages of the FHA home loan is that your lender cannot penalize you for paying off the mortgage early, paying more than the minimum required mortgage payment, etc. You cannot be charged fees simply because you pay off the loan sooner.

One of the big things a new borrower needs to understand about FHA home loans? FHA loan limits go up depending on the size of the home. A single-unit home has a lower loan limit than a two-unit property, a three-unit home, etc.

No matter what size home you buy, all financially qualified borrowers eligible for maximum financing will pay only 3.5% of the adjusted value of the home as the down payment.

Ask your loan officer about FHA loan options based on your financial needs and your goals for home ownership. You will be glad you did.

Joe Wallace - Staff Writer

By Joe Wallace

March 12, 2019

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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