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Important Considerations for Chicago FHA loans

With the recent changes in the mortgage world, many people are trying to find a loan to meet their needs. The Chicago no money down and interest only options from just a few years ago have quickly drying up. However, the tried and true Chicago FHA home loan is still a viable option for many homeowners. Here is a list of things to consider in regards to Chicago FHA loans.

1. The down payment requirement for a Chicago FHA loan is 3.5% of the purchase price. In addition, this down payment can be a gift from a relative, employer, or approved non-profit agency.

2. FHA loans typically have less stringent requirements compared to conventional loans. This makes it easier for people to qualify if their credit score is less than 700.

3. FHA allows buyers to have a "non-occupant co-borrower." This means that a parent or grandparent can sign as a co-borrower without being required to live in the home. Sometimes a parent or grandparent may have a very strong credit profile and little debt, enabling them to help a relative qualify for the loan.

4. FHA will allow the seller of the home to give 6% of the purchase price to cover the closing costs. Conventional loans only allow 3% of the price to go towards closing costs.

Although there have been a tremendous amount of changes in the mortgage lending world over the last few years, the Chicago FHA loan has stood the test of time. This type of loan is a great way to assist people accomplish the American dream of home ownership.

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