FHA Loans

FHA Loans

Federal Housing Authority (FHA) loans have been helping people become homeowners since 1934. Contrary to popular belief, FHA loans are NOT only for 1st time home buyers.  Some benefits of FHA loans are:

  • Low down payments (Minimum 3.5% down payment)
  • Down payment can come from a gift from a family member, community grant or 2nd mortgage
  • Low closing costs
  • Flexible credit qualifying

Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties (i.e. single family home, duplex, triplex, etc...)

Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.

Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.

Want to buy a home for your child?
Have you ever thought of buying a home or condo for your college student to live in while they are away at school?  Or maybe you want to buy your first home but need mom and dad's help.  In most cases a college student or young person just starting out does not have enough income to qualify for a loan on their own.  With an FHA loan we can use the parent's income to help the child qualify for the loan as an owner occupied property with just 3.5% down!

General Info:

FHA mortgages are home loans that are insured by the Federal Government. This insurance protects the lender from losses suffered if the home goes into foreclosure. It is not the same as hazard insurance or insurances that pay in the event the borrower dies or becomes disabled.


FHA allows a buyer to purchase a home with as little as 3.5% down. They tend to be more lenient on areas such as credit, funds to close and co-borrowers.


Most loans use a method of analyzing credit called credit scoring in the underwriting process. Studies have demonstrated a direct relationship between low credit scores and higher mortgage delinquency rates. As a result many lenders have established minimum credit scores at which they will accept loans. Unfortunately, a lack of credit, old delinquencies or incorrect information on the credit report can cause a low credit score. FHA does not have specific credit score requirements.  However, some banks or investors do impose a minimum credit score (usually 620).  Although a high credit score may assist in getting the mortgage approved, a low score is not automatically cause for denial. If the credit scores are low, then it is up to the borrower to demonstrate his/her ability and willingness to pay the loan back. This allows the borrower to explain the circumstances surrounding the credit difficulties and have that explanation considered in the underwriting process.


The underwriter on an FHA loan will review the credit and payment history of a customer concentrating on the most recent 12 to 24 months. If the customer has had a good payment record over the past 12 to 24 months they can often get approved for a mortgage even when Conventional financing has turned them down. An experienced loan officer can help the customer clearly tell their story and will often make suggestions as to how to make the file more acceptable to FHA. Because of FHA's leniency, some borrowers with past credit problems elect to use FHA for loans when they have a substantial down payment rather than getting a higher interest rate conventional loan. FHA tends to be more flexible than Conventional financing in the money needed to purchase the home.

FHA Loan Limits for the State of Hawaii by County:

County 1 Unit 2 Unit 3 Unit 4 Unit
Honolulu $721,050 $923,050 $1,115,800 $1,386,650
Hawaii (Big Island) $368,000 $471,100 $569,450 $707,700
Kauai $713,000 $912,750 $1,103,350 $1,371,150
Maui $657,800 $842,100 $1,017,900 $1,265,000
Kalawao $716,250 $916,950 $1,108,350 $1,377,450

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