If you’re buying a DLTA loft or condo for sale, you’ll most likely need a mortgage loan – and you’re not alone. Most people don’t have enough cash sitting around to buy a home with no mortgage. One of your options is an FHA loan.
What is an FHA Loan?
An FHA loan is a mortgage that’s backed by the Federal Housing Administration. With an FHA loan, you can:
- Put as little as 3.5% down
- Get approved despite a poor credit history
- Get extra funding for renovations and repairs
- Fund your down payment with gift money or with help from the seller
- Buy a condo or loft
The FHA guarantees this type of loan, which comes from a bank or credit union. Lenders use these types of loans because if you don’t make your payments, the FHA will cover them – and while that doesn’t benefit you at all (you’ll still go into foreclosure), it does benefit the lender.
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Qualifying for an FHA Loan
Many people feel that FHA loans are easier to qualify for than other loans are. That’s because:
- There’s no minimum income required – you only need to make enough to cover your loan payments.
- Borrowers with low credit scores are more likely to be approved with an FHA loan.
Not everyone qualifies, but if you have a credit score of 580 or higher, you could be eligible to put down as little as 3.5 percent. If you have a credit score between 510 and 580, you’ll have to put down a 10 percent down payment.
Are You Buying a Loft or Condo in Little Tokyo?
If you’re thinking about buying a condo in Los Angeles or a nearby community, call us at 213-254-7626 or contact us online. While you’re here, check out our: