If you’re looking to save some money, are a first time home buyer, or maybe don’t have an established credit history, the Pennsylvania FHA loan program may be the best option for you. Learn more about FHA loans in Pennsylvania, and see how it can make your decision-making process a little easier.
Why Use an FHA Loan in Pennsylvania?
Pennsylvania has a higher average cost of living in the United States, so its probable residents are trying to save money where they can. A Pennsylvania FHA loan is a great option for those looking to save some extra cash. Nearly $332 million was lent out in Pennsylvania FHA loans as of April 2019!
Benefits of FHA Loans in PA
- 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 Pennsylvania
Maximum FHA loan limits in Pennsylvania are adjusted annually, and can change depending on which county you are planning to purchase a house in. In most of Pennsylvania, the baseline limit of $472,030 applies, but in a place like Philadelphia, the limit is $529,000 due to the relatively high cost of real estate in the area. See the link below for the full list of Pennsylvania FHA loan limits.
Are You Eligible for an FHA Loan in PA?
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 PA?
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.