Getting an FHA Loan in Fairfax County
Government loans are in line for a record year as 2009 comes to a close, with FHA loans leading the way. In the wake of the subprime mortgage collapse, borrowers in Virginia and across the country are turning to these government-backed loans because of their safety and security.
FHA loans are insured by the federal government, a guarantee that helps boost lending and often translates into competitive rates for qualified buyers.
Drawn by that security and the agency’s low down payments, borrowers across the country have flocked to FHA loans in the last 18 months. The Federal Housing Administration will wind up approving more than 1.67 million loans this year.
FHA loans come with a host of significant benefits. Down payments are as low as 3.5 percent, and buyers with less-than-perfect credit may still qualify for an FHA loan. Even borrowers with a history of bankruptcy or foreclosure may still be eligible based on the FHA’s lending requirements.
Other benefits include:
- Competitive rates compared to conventional loans (within about .125 percent)
- Borrowers may qualify to finance most or all of their purchase.
- Borrower can roll the cost of private mortgage insurance (PMI) into the loan
- There are no financial penalties for loan pre-payment
- There are higher debt-to-income ratios than most conventional loans
FHA loans have long been a staple for first-time home buyers. The government’s $8,000 tax credit for first-time buyers is helping spur the surge in FHA loan applications. Qualified borrowers can use this “credit extended through the spring of 2010″ to help cut down payment or closing costs.
Like other government loan programs, the FHA has a lending limit based on geography. Limits vary throughout Virginia and the DC metro area. For Fairfax County, the loan limits are: $729,750 for a one-family unit; $934,200 for a two-family; $1,129,250 for a three-family; and $1,403,400 for a four-family.
