FHA loans have been around for a long time and have had many changes along the way. Because of that, many people have misconceptions regarding the program. Whether they think they have to be first-time homebuyers or that they cannot ever refinance out of the program, these misconceptions are keeping many people from taking advantage of a great program that offers low rates and great terms. Let’s take a look at some of the myths and what the real truths behind them are so you can be properly informed.

1. REGARDING
FHA LOANS
Debunking the Myths

2. FHA loans have been around for a
long time and have had many
changes along the way. Because
of that, many people have
misconceptions regarding the
program.

3. Myth:
YOU MUST BE A
FIRST-TIME
HOMEBUYER

4. This is perhaps, the largest myth. Yes, the
FHA loan used to be a popular program
strictly for first-time homebuyers, but
today, there are people of all ages and
with all types of housing history that use
the program.

5. Myth:
YOU MUST
PURCHASE A SINGLE-
FAMILY HOME FOR
AN FHA LOAN.

6. You do not have to purchase a single family
home. You have to purchase a one unit property
in most cases, but that includes condos and
townhomes. If you choose to use FHA financing
for a multiple unit property, you simply have to
prove that you will occupy one of those units.

7. Myth:
IF YOU DO NOT HAVE
ENOUGH CREDIT YOU
CANNOT GET AN FHA
LOAN

8. This truth depends on the lender you use, as
each lender can create their own rules in
addition to following the rules the FHA sets, but
most lenders will use non-traditional credit to
qualify you for a loan if you do not have enough
credit to qualify.

9. Myth:
YOU DECLARED
BANKRUPTCY SO NOW
YOU ARE NOT ELIGIBLE
FOR THE FHA
PROGRAM.

10. It used to be that you would have to wait many
years to get an FHA loan after a bankruptcy –
typically 7 years. Today, however, you can wait
as little as 2years for a standard bankruptcy
and even less time (12 months) if you have
extenuating circumstances.

11. Myth:
EVERYONE CAN PUT
DOWN JUST 3.5
PERCENT

12. Most people that apply for an FHA loan will be
able to take advantage of the low down payment
requirement of just 3.5 percent of the sales price,
but not everyone will be able to do this.

13. Myth:
YOU CAN USE FHA
LOANS ON ANY CONDO

14. The truth is that yes, you can finance a condo
with an FHA loan, but not every condo. The
condo association must go through an approval
process first. If they do not get approved by the
FHA, then no one can use FHA financing to
purchase a unit in that association.

15. Myth:
YOU NEED TO MAKE A
LOT OF MONEY TO
QUALIFY

16. The truth is for any loan, you do not need to make
A LOT of money. What you need to make is
enough to cover the mortgage you intend to take
on in addition to the other monthly obligations
you have and still have money left over.

17. Finding the
BestFHALender is a one­stop shop offering
useful information about FHA loans and
enabling customers to shop for multiple lenders.
Best FHA Lender
CLICK HERE TO LEARN MORE

18. Information Provided by
He is Americas Mortgage Commentator
and has been providing Mortgage
commentary for over 10 years.
Justin Mchood

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