In Utah, like elsewhere in the nation, FHA loans are a popular option for first-time homebuyers.
Insured by the Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development, FHA mortgage loan requirements are more flexible than most other lending programs. Buying a home may be easier with this form of financing, so it’s no wonder that so many would-be homeowners choose FHA loans.
If you’re planning to buy your first Utah home and are curious about the FHA loan program, the professional team at Intercap Lending can tell you everything you need to know. In the meantime, though, the basics are outlined below.
The FHA Mortgage Program
FHA loans are government-backed loans designed to provide an easier route to homeownership. Through the lending program, those who qualify can purchase properties with a down payment as low as 3.5 percent. And compared to conventional mortgages, FHA home loans are more forgiving when it comes to credit scores and debt issues.
The only catch? Mortgage insurance is mandatory, as that protects the lender in the event you are unable to pay back the loan. Borrowers must pay an upfront premium, either out-of-pocket at closing or wrapped into the balance. There’s an annual FHA mortgage insurance premium, too, but that can be split up and added to the monthly loan payment.
FHA Loan Requirements
While every FHA-approved lender can establish their own underwriting standards, they must be in line with the guidelines set by the Federal Housing Administration. The basic requirements to qualify for an FHA loan include:
- A minimum down payment of 3.5 percent with a credit score of at least 580 or 10 percent down with a score as low as 500
- A debt-to-income ratio in the 43 to 45 percent range, though some lenders may allow a DTI as high as 50 percent
In addition, the Utah home a borrower wants to purchase must be in good condition, and an FHA appraiser will confirm that the property is safe, sound and secure. These mortgages are only for primary residences, not vacation homes or investment properties, and the FHA has lending limits, which vary by county. In Utah County, for instance, the maximum for 2024 is $601,450, while the loan limit in neighboring Wasatch County is $1,149,825.
Would You Like to Know More About First-Time Homebuyer Loans?
The mortgage professionals at Intercap Lending have extensive experience with first-time homebuyer loans, and we’d be happy to help you explore your options. For more information on FHA loans and the many other mortgage options for would-be Utah homeowners, contact our office today.