It’s hard not to plant roots in Louisiana. The “Pelican State” is home to some of the best food, art, music and beaches this country has to offer.
However, evaluating all of the home financing options available can be difficult to understand. Many people in Louisiana choose an FHA loan in order to take advantage of the program’s low down payment opportunities, buyer-friendly credit requirements, and more. Keep reading to learn why a Louisiana FHA loan could be the right mortgage option for you.
Why Consider an FHA Loan in Louisiana
From Shreveport to New Orleans, people have been leveraging the benefits of the FHA loan program to buy their homes. As of April 2019, over $161 million dollars were lent through the FHA loan program! No matter where you choose to live in Louisiana, an FHA loan can be a reliable mortgage option for you.
Benefits of FHA Loans in LA
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Louisiana
There are maximum FHA loan amounts for Louisiana FHA loans, so you'll want to have some idea of how much you can borrow before you start shopping. The maximum is adjusted every year and, for 2019, is currently $314,827 for single family dwellings.
The loan limit is typically adjusted for areas with higher cost of living so regardless of your location, you'll be able to afford a home. However, since Louisiana does not have a high cost of living, the baseline limit applies statewide.
Are You Eligible for an FHA Loan in LA?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30 day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
What Do You Need to Apply for an FHA Loan in LA?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.