Which San Diego Condos and Townhomes are approved by HUD in 2017
Buyers come to us confidently pre-approved for an FHA loan, but we find their lender sometimes fail to explain what an FHA approved condo is. An FHA loan pre-approval doesn't mean you can purchase any condo or townhome listed for sale.
What is an FHA loan?
An FHA loan is a loan funded by a private investor that is insured by the Federal Housing Administration in the event of a default. Investors are more flexible with their underwriting guidelines due to the FHA MIP (mortgage insurance premium). The nuances that make FHA loans attractive to first time home buyers are:
- Credit score and lighter credit depth
- Higher debt to income ratios
- More flexibility