FHA at Any AgeThe Federal Housing Administration offers potential home buyers more access to mortgages. The FHA only requires a 3.5 percent down payment and a credit score of 580 before backing a loan. Additionally, the opportunity offered by the FHA affords a number of additional benefits that make borrowing more attractive, especially to younger buyers.

What is an FHA Loan?

FHA insures this mortgage loan. This is typically a more available mortgage option for hopeful homebuyers. According to Zillow, a real estate company, loan size limits vary dependent upon your region. Check in to see what the restrictions for your specific area are.

Debt Compared to Income

These types of mortgages allow for more flexibility when applying for a home loan and your debt-to-income ratio is no exception. FHA will measure income from multiple perspectives, allowing individuals to qualify for a larger loans.

According to the U.S. Department of Housing and Urban Development, qualifying ratios fall between 31 percent and 45 percent dependent upon the type of loan the borrower falls under.

Paying Off a Mortgage Early

Some lenders may penalize you for paying off your mortgage early. Prepayment fees are often a consequence for paying off a mortgage in full. With an FHA loan, this option is available to you without the undesired repercussions. Free and clear homeownership becomes a more available option without any fees.

Loans Eligible for Transfer

Younger individuals deciding to purchase a home might be hesitant to commit to a 30-year fixed rate mortgage at such an early point in life. FHA loans may be eligible for transfer. If an individual decides to move from their property earlier, that mortgage may be reassigned to the new homeowner.

Seller Contributions

FHA loans allow sellers to contribute up to 6 percent of the final selling value of the home to help cover closing costs. This perk is exceptionally beneficial to younger potential homebuyers.

In addition, there are more options for third parties, such as builders or lenders, to cover costs. Possible areas of coverage include title expenses, closing costs and the price of running a credit report.

Housing Repair

HUD reported that FHA’s Streamlined 203(k) program allows individuals to finance up to $35,000 into their mortgage for repairs and upgrades to their home. This allows homebuyers more convenient access to homes that may have otherwise been too much of a project to take on due to repairs and updates.