September 21, 2021

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Buying Your First Home With An FHA Mortgage

What is my FHA home loan down payment?

What do you need to know about buying your first home? If you want to explore your FHA home loan options there are some things to remember–FHA mortgages require a 3.5% down payment, it’s true, but you can apply for local down payment assistance to help offset that expense.

A first-time home buyer may have state and local programs open to them that can help.

But that’s just one aspect of buying your first home you should be mindful of. Some don’t realize how flexible an FHA mortgage can be. You can select a typical suburban house to buy, but you also have the option to apply for an FHA mobile home loan, an FHA condo loan, etc.

One thing to remember about all of these options–FHA loans do not allow a penalty for paying off the FHA loan early through refinancing or selling the house, or simply making larger payments.

Compare that to some conventional loans that DO feature such penalties.

Some borrowers want to buy a home for the first time but don’t have any illusions about that property being more than a “starter home”. If you are planning to sell the property long before your home loan payments are complete, consider the option of an adjustable-rate mortgage which may feature a lower introductory interest rate.

Borrowers who plan to stay in the home long term should likely avoid an adjustable-rate mortgage unless they have a specific strategy for dealing with the end of the “teaser rate” stage and the beginning of mortgage loan rate adjustments.

If you don’t have or don’t plan an exit strategy for an adjustable-rate FHA mortgage, you may be better off avoiding them.

Remember, a conventional lender may have a more frequent rate adjustment scheduled for ARM loans than FHA mortgages allow–be sure to ask!

FHA home loans are not specifically or only for first-time home buyers. What does that mean? Simply that where FHA loan guidelines are concerned, new borrowers won’t get any special advantage under FHA loan rules for being a first-time buyer.

But, as mentioned above, you may qualify for a state program and the OTHER thing you should explore while shopping around for a lender is whether any of your selections offer an option for a first-time buyer. Your financial institution may have a program available. The FHA won’t but your lender might.

For FHA home loans you will find more lenient credit requirements but in general, expect to be required to have a dependable employment record plus a history of on-time payments on all financial obligations for 12 months or more leading up to the loan application.

To get the most out of an FHA mortgage, shop around for the right lender, work on your credit a year or more ahead of your loan application, and be sure to get a home inspection in addition to the appraisal your lender requires. You’ll be very glad you did.

Joe Wallace - Staff Writer

By Joe Wallace

August 2, 2021

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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