Rather than trying to qualify for conventional loans, many people find that applying for FHA loans in Birmingham, Michigan is a much better option. Not only do we offer FHA loans at Gem Home Loans, we also offer many other programs. Is an FHA the best option for your specific situation? We’ll help you find out. If it’s not, we’ll go to great lengths to make sure you get a loan that will fit your financial situation for years to come.

The Basics

FHA Loans Birmingham, Michigan The U.S. government – specifically, the Federal Housing Administration – backs all FHA loans. That basically means that if someone defaults on this kind of loan, the FHA will cover it up to a certain amount. The Department of Housing and Urban Development (which you probably know as HUD) sets the regulations and requirements that determine whether or not you’ll qualify for an FHA loan. This is a very popular alternative for people who either don’t have the money set aside for a 10 percent down payment, or they’re purchasing a home for the first time.

But not all FHA loans are the same. In fact, there are several categories. These include the following.

  • Energy-efficient mortgage loans – This is designed for people who are already in a home, but are making improvements to make that home more energy efficient. This could mean purchasing an air conditioning unit that can lower your monthly bills, or putting in a solar energy system.
  • Home Equity Conversion Mortgages – This is also known as a “reverse mortgage,” the kind you’ve more than likely seen advertised on TV. If you’re 62 or older, you can convert the equity you’ve built in your home into cash. You keep the title to the home, and you choose how you want the money disbursed. For example, you can choose to receive a monthly payment, use the money as a line of credit, or combine both options.
  • Section 245(a) – You may not be at a certain income level at the moment, but you expect to get there eventually. Your mortgage payments will be lower at first, and will then go up over time.

Is an FHA Loan the Best Choice?

The benefits of FHA loans are numerous. You may be able to qualify if your credit score isn’t as high as you like, or you can’t afford a big down payment. In fact, if you can meet the criteria, you could get a home for as little as 3.5 percent down. First, you must have at least two active credit accounts. Second, you can’t have a credit score lower than 580. If it’s in the 500-579 range, then you’ll have to pay 10 percent down.

In order to obtain an FHA loan, the property has to meet minimum health and safety standards. If you’re planning to fix up the home and flip it, you probably won’t be able to get this kind of loan. Talk to Gem Home Loans and we’ll let you know all your options.

We’d Love to Hear from You

Let Gem Home Loans help you cut through all the confusion that can be associated with FHA loans in Birmingham, Michigan. We’ll clearly explain all of your alternatives, and help you breathe easy knowing you’ve made the right choice. Give us a call at (248) 780-1030 or contact us online to learn more.