FHA loans are mortgages issued by qualified lenders, including traditional lenders like Citigroup and Wells Fargo, and insured by the Federal Housing Administration (FHA). The popularity of these loans are skyrocketing and for good reasons. They feature low down payments, low closing costs and are easier to qualify for.
Despite this popularity, there are many misconceptions surrounding FHA loans. Here are just a few myths and the facts behind them.
Myth #1: FHA only loans small amounts to buyers of Santa Cruz homes.
Fact: To help stabilize the real estate market, the government recently raised the maximum loan amount from its original cap of $362,790 to $793,750. The FHA loan amount a buyer can borrow varies by state and county.
Myth #2: FHA loans are exclusively for lower-income borrowers.
Fact: FHA loans are available to everyone. There are no maximum income restrictions. Potential borrowers must verify income and assets to ensure they can afford the loan.
Myth #3: FHA loans are exclusively for first-time buyers of Santa Cruz homes.
Fact: Whether Santa Cruz home buyers are making their first home purchase or their twentieth, they can potentially qualify for an FHA loan.
Myth #4: FHA loans are affiliated with the low-income housing program.
Fact: FHA loans have nothing to do with the Section 8 Housing Program or any other low-income or subsidized housing programs. FHA loans are simply mortgages insured by FHA.
Myth #5: FHA loans are risky.
Fact: FHA loans are often easier to obtain, but that does not make them riskier. The FHA requires full documentation of borrowers’ income and assets to ensure they can afford the loan.
If you’re ready to look at Santa Cruz homes to buy, whether you’ll be using an FHA loan or a non-FHA loan, I can help you find your perfect home. Give me a call today at 831.662.6522 or email me at Lauren@LaurenSpencer.com to get started. For additional information please visit my website at www.MySantaCruzRealEstate.com.