Is an FHA Loan right for me?

March 5, 2018 by Joe Grunnet

Getting an FHA Loan in Minneapolis

At DRG, we know that everyone has different circumstances, wants, needs, and goals that lead them to buy and sell real estate in Minneapolis. Our biggest priority is learning about our clients and what they need in order to have a successful transaction. We work with a variety of clients who have a range of financial situations. That is why we work with trusted lenders to help our clients find the best loan for their unique situation.

We consulted with our preferred lender to give you some additional insights on FHA loans in Minneapolis!

One popular loan type is an FHA loan. An FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA). FHA loans are especially popular with first time home buyers as they allow down payments of 3.5% for individuals with a credit score of 580+. But that isn’t their only benefit. Other benefits include:

  • Better rates with less than perfect credit.
  • Better monthly mortgage insurance with less than perfect credit.
  • More flexibility with debt to income ratios.
  • Relaxed underwriting guidelines.

While these loans offer a lot of benefits, they also come with a few requirements for individuals to qualify:

  • Monthly Mortgage Insurance on All Loans
  • If you have more than 10% down there may be an option to have mortgage insurance removed in the future.
  • If you have less than 10% down you will have mortgage insurance for the life of the loan.
  • 3.5% Minimum Down Payment
  • 580 Credit Score Required with 3.5% Down
  • 500 Credit Score Required with 10% Down
  • Maximum Option of 6% in Seller Paid Closing Costs

An FHA loan can be a great option for those looking to purchase a condo, loft, or townhome in the booming downtown Minneapolis market, but don’t know if they are able to meet a high down payment requirement or have less than perfect credit. But before you start looking you should know of a few additional requirements specific to Hennepin County:

  • Hennepin County Loan Limits
  • $356,500 – Single Family or Condo
  • $456,350 – Duplex / 2 Unit

The downtown Minneapolis real estate marketing is booming, so before you begin house hunting, be sure to speak to a qualified lender to not only get pre-approved, but also to ensure you know all your options.

LOOKING TO PURCHASE A HOME IN DOWNTOWN MINNEAPOLIS?

Visit our website or give us a call at 612-315-7889.

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