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Loan

FHA loans in Arizona

A government-backed loan many first-time buyers ask about.

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What it is

How it works

FHA loans are insured by the Federal Housing Administration. We explain mortgage insurance, property standards, and whether FHA or a conventional loan costs less for you.

Who it fits

  • Buyers whose credit is still being built or has a past bump.
  • Buyers with less saved who want a government-insured option.
  • Buyers whose down payment comes partly as a gift from family.
  • Buyers of a home with up to four units who will live in one of them.

Key facts

Good to know

  • FHA loans are made by private lenders and insured by the Federal Housing Administration, part of HUD.
  • The home must be your main home, and the appraiser checks it against FHA's safety and soundness standards.
  • FHA charges mortgage insurance two ways: an upfront premium, usually added to the loan, and a yearly premium paid monthly.
  • A qualified buyer can take over an FHA loan when you sell. That can help if rates have risen.
  • Waiting periods after a bankruptcy or foreclosure are often shorter than for a conventional loan.

Calculator

An FHA payment

You type every number. Nothing here is today's rate.

FHA

An FHA purchase with the upfront mortgage insurance added to the loan, the way most people pay it. You type the rate.

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You type the rate. We never fill it in.

Term
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Monthly payment

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Add your numbers to see the estimate.

Base loan
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Upfront mortgage insurance, added to the loan
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Total loan
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Principal and interest
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Mortgage insurance per month
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FHA's upfront premium is 1.75% of the base loan. Most people add it to the loan, so the payment is figured on the total.

This is an estimate, not a loan offer. A lender has to confirm it.

This is not a commitment to lend or lock a rate.

Rates change. Call us. (480) 297-8855

Costs and limits

What it costs

The kinds of costs, not amounts. Your Loan Estimate lists the numbers.

Costs to expect

  • An upfront mortgage insurance premium, which most people add to the loan instead of paying at closing.
  • A yearly mortgage insurance premium, split into your monthly payment.
  • With a smaller down payment, the yearly premium lasts as long as the loan. Ending it then usually means refinancing.
  • The usual closing costs. The seller can pay some of them, up to FHA's limit.

Limits

  • FHA sets a loan limit for each county and updates it every year.
  • Only for a home you will live in, not a rental or second home.
  • Repairs the appraiser calls for on safety or soundness have to be done before closing.

Compared

How it compares

Next to Conventional loans in Arizona.

  • FHA is often more forgiving about credit history. A conventional loan usually rewards stronger credit with lower costs.
  • FHA's yearly premium often stays for the life of the loan. A conventional loan's private mortgage insurance can be cancelled once you build enough equity.
  • FHA adds an upfront premium. A conventional loan has none.
  • FHA is for your main home only. A conventional loan can also buy a second home or a rental.

Read about Conventional loans in Arizona

The process

From first call to closing

  1. Talk

    A short call about your goals, your timeline, and the kind of home you want. Ask us anything.

  2. Apply

    You fill out the application online. It asks for your Social Security number and documents, and we give you a clear list of what to send.

  3. Compare

    We compare lenders for your loan and show you the options side by side, with the tradeoffs explained.

  4. Close

    We stay with you through appraisal, underwriting, and signing, and keep you posted at each step.

Questions

Questions about this loan

Not here? Call (480) 297-8855.

Is FHA only for first-time buyers?

No. Anyone who will live in the home can use an FHA loan, including people who have owned before.

Can family help with my down payment?

Yes. FHA allows gifts from family and some others, with a letter saying the money does not need to be paid back.

Can I remove FHA mortgage insurance later?

It depends on how much you put down. With a smaller down payment it stays for the life of the loan, and the usual way out is refinancing to a conventional loan once you have the equity.

Can I buy a fixer-upper with FHA?

A standard FHA loan needs the home to pass FHA's standards at closing. FHA's 203(k) renovation loan can include the cost of repairs.

Reviews

From a client

Read all reviews

Chance is someone you can trust from the begging to the end of the transaction. I'm grateful to have found him to help me with the purchase of my home. Chance answered all of my questions and concerns, in detail. Couldn't have done it with out him. Buying a home can be challenging in number of things from the seller, realtor, title, etc. Chance made it easy for me, to understand, trust and believe that I was making the right decision . Thank you Chance, from my daughter and I. Sincerely, Edith Peralta, MBA/CCC

Edith Peralta

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