"Assumable" means "someone else can take over the loan when they buy your home." As this short video explains, FHA loans are usually assumable. If you have an FHA loan, particularly one with favorable terms, and it is assumable, you may have another tool in your selling negotiation. The process of assuming a loan can be easier, and sometimes less expensive, than starting a completely new loan. This is good for the buyer! Assumption requires a credit check, but home appraisal and other processes and costs can be skipped. Interest rates will affect the value of assumability. If interest rates have dropped since you originated the FHA loan, of course, there will be less interest in assuming it. Know the interest rate and terms of your FHA-backed loan, and read the loan terms to see if it is assumable, before selling. It may help you sell. And if you are in the process of buying with an FHA-backed loan, ask whether the loan is assumable. If interest rates rise, that assumable loan may become a valuable asset when you sell in the future.

The Federal Housing Authority revises the guidelines for acceptable DTI (Debt-to-Income Ratio) on FHA-backed loans regularly. They have increased slightly in the last few years. In 2013, for example, DTI allowed up to 29% of earnings as real-estate expenses, and 41% in total long-term debts including real estate. As of 2020, FHA guidelines allow up to 31% in real estate and 43% in total monthly debt payments. Approval to exceed these ratios is sometimes allowed, if: You can make a large down payment You have large cash reserves Other assets that make a substantial personal net worth Your credit history is especially good The mortgage terms are better than current averages Another organization is providing some of the mortgage funds Keep in mind that these are maximums, aimed at helping consumers take on sustainable levels of debt. Consider your long-term situation carefully and dont think of these ratios as automatic targets.

Loans from FHA-approved lenders (Federal Housing Authority) provide more flexibility than conventional loans. Here are some of the things generally allowed in re-establishing credit via FHA loans: If you went through foreclosure or deed-in-lieu, if 3 years have passed, you may be eligible If you had outstanding tax liens, if youve arranged a repayment plan with Federal (IRS) or state tax authorities, you may be eligible If you have judgements that have been paid, you may be eligible If you went through bankruptcy at least 2 years ago, you may be eligible. For borrowers with unusual credit records — for example, those who prefer paying in cash and carrying no debt — FHA may be an option. Likewise, new or first-time buyers with little established credit should investigate FHA programs for assistance. Talk to an FHA-approved lender to learn more.

Loans from FHA-approved lenders (Federal Housing Authority) follow most of the same steps as conventional loans. As you might expect, because a Federal agency is involved in the loan, there may be just a bit more paperwork. The FHA has worked hard to speed up the origination process. Their innovations include options for applying without face-to-face meetings, via telephone and video conference. Search for FHA-approved lenders in your area, and get in touch with them to find out about current programs and options for your situation.

The Federal Housing Authority — FHA — is a Federal agency tasked to help more Americans take advantage of home ownership. While the FHA is not a direct lender, it operates a wide range of programs to help people. FHA-approved lenders frequently allow for smaller down payments and easier terms than conventional non-FHA loans. Its not uncommon for FHA payments on a home you own to be lower than rent! If you think home ownership is out of reach, get in touch with FHA-approved lenders and see what current programs can do to help you out.