FHA Loans Research Paper

If you don’t have a clue on what a FHA loan is, it’s basically a mortgage insured by the Federal Housing Administration (FHA) where the borrower pays for mortgage insurance, protecting the lender from a loss if he defaults on the loan.

The main reason FHA loans in Texas are an attractive option is that they come with great interest rates and less stringent – more flexible qualification requirements.

Texas is the second largest and second most populated state in America. On top of that, it is known for the major oil discoveries dating back to the early 1900s – but also the current presence of more Fortune 500 companies than any other state. That makes Texas a leader in energy, electronics, electronics, aerospace, biomedical science as well as agriculture. And yes –

The less-than-perfect credit is OK

You only need a credit score of 580 or higher to apply for a FHA loan in Texas. If your credit score is between 500 and 579, your down payments must be at least 10%. If it is under than 500, though, you are generally ineligible for Texas FHA loans.

2. The minimum downpayment is only 3.5%

This is one of the most attractive aspects when it comes to the FHA loans in Texas. And when you see that it was reduced from the 10% until 2014, you can see that it is a big advantage to any borrower.

Using your own savings to make the downpayment is also a possibility – including ‘gifts’ from family members or grants from the state or local down-payment assistance program.

3. The FHA allow concessions to cover some of your closing costs

The FHA loans in Texas work with a coverage to home sellers, builders and lenders whenever it comes to the closing costs such as credit reports, title expenses or appraisals. For example, a builder might offer himself to pay the closing costs as an incentive for the borrower to buy a new home. FHA loans allow up to six percent (6%) in Seller’s concessions to the buyer’s closing costs and prepaid items.

4. Your Lender must be