FHA Home Loan Options for 2021

December 18, 2020

If you are interested in buying a home in 2021, you have higher FHA home loan limits to look forward to. You also have a range of FHA home loan options you should seriously consider that can provide alternatives you might not be aware of.

What kind of alternatives? You can use an FHA mortgage to build a home instead of buying someone else’s house, you can purchase a fixer-upper with a rehabilitation mortgage, and you can purchase a condo unit or mobile home. Here are some of the most popular options you can choose with an FHA mortgage.

FHA One-Time Close Mortgages

An FHA One-Time Close home loan is for those who want to build, not buy. Even a first time home buyer can qualify for a construction mortgage and you can either build on your own lot or purchase land in conjunction with the construction loan to put the house on. One-Time Close mortgages usually feature slightly higher lender-required FICO scores, so be sure to ask your participating lender what is required to qualify.

FHA Condo Loans

FHA loans are possible for condo units in approved condo projects or condo projects that are added to that approved list.

You’ll need to make sure the condo owner’s association won’t require restrictive covenants from you such as “the right of first refusal” as any limitation in the agreements on how you sell or dispose of the property is not permitted under FHA loan rules. But condo loans are definitely possible with the FHA home loan program.

FHA Mobile Home Loans

If you want to purchase a mobile home with an FHA mortgage in 2021, know that these loans are specifically for mobile homes that will be affixed to a permanent foundation that meets FHA and local code requirements. Mobile home loans under the FHA program require the home to be 400 square feet or more and the structure must be taxable or classifiable as “real property” even if it is not taxed as such.

FHA Rehabilitation Mortgages

FHA Rehab loans let you apply for a mortgage to buy or refinance a property and get funds to repair or renovate it at the same time.
 
Be aware that while first-time home buyers are definitely permitted and welcome to apply for the program, don’t apply expecting to be your own contractor or to perform your own repair work--your participating lender may not permit this. Ask before you apply for best results. There are two different kinds of FHA rehab loan--one is for disaster victims--but both types can be used together where applicable.

 FHA, VA, and USDA: One-Time Close Loans

Want More Information About One-Time Close Loans?

We have done extensive research on the FHA (Federal Housing Administration), the VA (Department of Veterans Affairs) and the USDA (United States Department of Agriculture) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.
 
FHA.com provides information and connects consumers to qualified One-Time Close lenders in an effort to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
 
Please note that investor guidelines for the FHA, VA, and USDA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs:  Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.
 
Your email to [email protected] authorizes FHA.com to share your personal information with a mortgage lender licensed in your area to contact you.

1. Send your first and last name, e-mail address, and contact telephone number.
2. Tell us the city and state of the proposed property.
3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines.  Most lenders will go up to $750,000 and review higher loan amounts on a case by case basis.   If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.