FHA Loans in Virginia
Through the Federal Housing Administration (FHA), FHA loans in Virginia work to expand the rate of homeownership among state residents and generally provide an equal opportunity for housing to Virginians of any socioeconomic background. A few of the advantages of FHA loan types offered by the state include ownership assistance open primarily to first-time homebuyers, counseling resources and lower monthly mortgage payments. While these benefits are offered by most FHA loans in VA, shoppers should note that the FHA is not a direct-lending institution. Rather, the FHA oversees a network of private lenders that will work with loan shoppers. Each FHA loan will offer a variety of different benefits specific to what the lender has elected to offer. Loans within this network are generally more flexible and provide lessees with the ability to obtain credit they otherwise may not be eligible to receive in the marketplace. Learn more about how to get an FHA loan by reading the information below.
Types of FHA Loans in Virginia
Depending upon the selected institution, an applicant’s VA FHA loan eligibility will vary along with the benefits offered by each lender. This variation in FHA loan qualifications is due to the expansiveness of the Federal Housing Administration’s private lending network. Each institution that has satisfied the FHA loan requirements to be considered an FHA lender. Despite these differences, there are three major FHA loan types that shoppers should be aware of when shopping for single and multi-family homes.
The most common FHA loan in VA is the Section 203b. These types of FHA loans prominently feature lower down-payments, financeable closing costs and fee limits for lenders, along with longer repayment periods. Shoppers benefit from lower down-payments, as this reduces the upfront cost of purchasing a home. In addition, the ability to finance closing costs on a home makes the overall cost of ownership more accessible to lower-income purchasers, although buyers should note that financeable closing costs will still require upfront premiums which may also be financed. Under this type of Virginia FHA loan, lenders will be barred from charging significant fees and administrative charges due to an FHA fee limit. Lastly, Virginia residents will benefit from longer repayment periods up to 30 years.
Another major FHA loan type in Virginia is the Section 203h loan, which provides assistance specifically to disaster victims. Purchasers of a 203h FHA loan will have had homes that were either destroyed or significantly damaged by a qualifying disaster. Advantages of FHA loans under this section include no down-payment and 100 percent financing for the cost of a new home or repairs on a damaged home.
The third most popular FHA loan in Virginia is the adjustable mortgage rate plan also known as a Section 251 loan. This allows for the homebuyer to maintain a low mortgage interest rate that will ultimately cap at five percent over its lifetime. To learn how to apply for an FHA loan in VA, download our comprehensive guide today.
FHA Loan Eligibility in Virginia
For those wondering about how to get an FHA loan in Virginia, there are certain eligibility requirements that must be fulfilled before submitting an application. Applying for an FHA loan in VA requires candidates to first qualify as first-time homebuyers, receive home ownership counseling and provide income statements to determine eligibility. The FHA loan application process is also closely linked to these eligibility guidelines, so interested purchasers will effectively complete much of the preliminary application process when validating their own eligibility.
Virginia FHA loan eligibility guidelines generally favor candidates who have never owned a home. This is because the majority of FHA loan plans are meant to benefit first-time purchasers, although there are some lenders that will provide assistance to low-income purchasers who may have owned a home in the past.
Second, a requirement for all Virginia FHA loan applicants is to first receive homeownership counseling before receiving credit. Counseling is meant to educate applicants about the resources available to them in order to reduce the likelihood of missed payments and defaulting on loans and also provides information on how to budget and protect credit scores in the face of missed payments. Typically, the lending institution will provide information on where to receive counseling while determining eligibility for an FHA loan in VA, but applicants may also search the Virginia area for homeownership counseling agencies.
Third, homebuyers can only be eligible for an FHA loan if their annual income is below a certain level when compared to the area’s median income. This number is defined by the Virginia HUD office and works to prioritize lower-income purchasers to receive loans. When learning how to apply for an FHA loan in Virginia, applicants will be asked to provide evidence of their income using either income statements, W-2 forms and other options as dictated by the lessor.
Shoppers will be able to apply for an FHA loan once all of the aforementioned information has been provided. This can be done by finding an approved lender, completing the VA FHA loan application for the selected institution and making a down-payment should it be required. From here, the process will be generally handled by the selected institution, but they may require additional information in order to set up the funds, disburse them into an account and verify the transaction. To obtain more detailed instructions for applying for an FHA loan, you can download our complimentary guide today.