The maximum FHA loan amount for the Plano,TX, Dallas-Ft. Worth area has increased from $310,500 to $334,650 for 1-family homes effective January 1, 2016.

2016_FHA_loan_limit

CLICK HERE to read HUD’s announcement.

The minimum down payment for a FHA loan remains the same at 3.5%.  In the Dallas – Ft. Worth area the maximum sales price with minimum down payment is $346,787.  FHA mortgage insurance, both upfront premium and monthly, remain the same.

FHA is usually used primarily by first-time home buyers since credit score requirements are less than the 660+ required for Conventional mortgages. One of the main attractions for FHA is that FHA allows documented gift funds for the down payment and closing costs from a family members or a Down Payment Assistance Program.Plano Mortgage Plano Loan

FHA is also popular for borrowers whose credit score is less than 660 since it is difficult/impossible for borrowers to obtain conventional mortgage insurance with minimum down payment and lower credit scores. Highlands Residential Mortgage FHA underwriting guidelines allow a minimum credit score of 620 and can allow scores down to 600 with extenuating circumstances.

PLANO HOME LOANS

FHA financing has fallen out of favor recently due to the increase in mortgage insurance rates.  The increase in mortgage insurance rates is due in part to the economic down-turn of the past 6 years.  Many times, the borrower is paying $100 more per month or more in mortgage insurance when compared to a similar conventional loan.  A lot of customers, with credit scores of 660 or better are now considering the option a conventional loan with a 3% down payment and using a Down Payment Assistance Program.  Generally the total out-of-pocket costs is the same, when compared to FHA, but the monthly payment can be significantly lower.  For more information about your particular situation, please call your Plano Mortgage Guy, Warren Whitaker @ 972.523.8353.

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