Rhode Island FHA Loan
If you are thinking of buying property in Rhode Island, then you will need Rhode Island FHA mortgage. According to a census data accumulated for the year 2000, there were 439,837 housing units in Rhode Island in 2000 as compared to 414,572 in 1990, which is an increase of 6.1%. Out of these there were 399,724 located in the urban area and 40,113 located in the rural area. The homeownership rate in Rhode Island is about 60% as of today and the vacancy rate including seasonal lodging stands at about 7.1%. The average household size in Rhode Island is 2.47 people and most of the houses, apartments and condos were built after 1958.
The FHA loan program was created way back in the 1930's to help increase homeownership. The Rhode Island FHA program has been created to make it easier and affordable for most people to buy a home as compared to other types of real estate mortgage programs. Some highlights of the FHA in Rhode Island are:
- The down payment and closing costs are minimal
- The down payment is less than 3.5% of Sales Price for a Rhode Island FHA loan
- FHA assures lenders who in turn offer almost 100% financing
- FHA enables down payment and closing costs to be made in the form of gifts
- FHA regulates closing costs
- A Seller can credit up to 6% of sales price towards the buyers costs
- There is an easier credit qualifying guideline like:
- No minimum FICO score or credit score requirements
- FHA will even allow you to purchase a home two years after a bankruptcy
- FHA will even allow you to purchase a home three years after a foreclosure
- There is an easier debt ratio & job requirement guideline
These are some of the many advantages of a Rhode Island FHA mortgage program, which has made it one of the best options for a first time home buyer as well as move-up home buyers to purchase the real estate property of their choice. Now you don't have to be a first time buyer to obtain a FHA loan in Rhode Island but you can't have more than one FHA loan at a time.
A Rhode Island FHA Lender also allows convenient down payment assistance programs. Under the Down Payment Assistance Programs or DAPS, as a first time home buyer, you will get assistance for making the down payment and towards closing costs required under the FHA mortgage in Rhode Island program.
There are different types of down payment assistance programs, which you can find with a Rhode Island mortgage company and can be divided basically into two types of loan programs. One of them is the 501 (c) (3) non-profit organizations state backed down payment assistance programs. The 501 (c) (3) non-profit down payment assistance programs require the assistance of the home seller to help the buyer in taking advantage of this loan program. Here is a list of some of the available down payment assistance programs (DAPS) offered by non-profit organizations.
- Nehemiah: This program grants around 3.5% towards down payment
- HART: This program can get you grants up to $15,000 towards closing costs and down payment.
- Neighborhood Gold: This program assures you a grant of up to 20% and includes mortgage payment protection.
The FHA loans are probably the easiest type of real estate mortgage loan in Rhode Island to qualify for. The FHA guidelines in Rhode Island, for loan qualification are extremely flexible and require less than 5% down payment.
Let us take a look into the basic FHA loan qualification guidelines. They are:
- Two Years of steady income or employment. Employment with the same employer is preferred.
- The income from the last two years can be same or should show an increase.
- Your credit report should typically have less than two thirty day late submission in last two years.
- If you have filed for a bankruptcy then it must be at least two years old showing good credit since then.
- If you have been through a foreclosure then it should be at least three years old and should show good credit since then.