Buying your first home can be one of the most exciting times in your life, but it's also one of the scariest. It's hard to know where to start the process, and sometimes there are so many financing options that you're not sure how to choose one.
Whether you’re a first-time homebuyer or not, there is potential to save money on a down payment, money you can spend the next time you visit Church Street in downtown Burlington. FHA loans are a great choice for Vermont buyers, so continue reading to see why an FHA loan is right for you.
Why pick an FHA Loan in Vermont?
Despite Vermont’s small size, lots of people are still choosing to purchase a home using the FHA home loan program. In fact, as of April 2019, the total value of FHA loans in the state of Vermont was over $8.7 million!
Benefits of using an FHA Loan in VT
- 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 Vermont
Knowing how much you can borrow is an important number to know while shopping for the perfect house. Maximum FHA loan limits in Vermont are adjusted annually, and depend on where in Vermont you want to reside. In most of Vermont, the baseline limit of $420,680 applies, but in a place like Burlington, the limit is $434,700 due to the relatively high cost of real estate in these areas. Use the table below to see the full list of Vermont FHA loan limits for 2022.
Vermont FHA Loan Limits by County
|County||FHA Loan Limit|
|All other areas||$420,680|
Are You Eligible for an FHA Loan in VT?
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.
Learn More About FHA Loan Requirements
What Do You Need to Apply for an FHA Loan?
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.