Missouri FHA Loans
Many first time homebuyers are unaware of all the financing options available to them when they're about to purchase their first house. Unfortunately, this lack of education can mean that these same homebuyers haven't gotten the best financing options for their situation. If you're thinking about buying your first home, be sure to educate yourself on every available loan option, including the Missouri FHA loan program.
FHA Loan Benefits
Managed by the Federal Housing Administration, the Missouri FHA loan program's function is to provide good quality, competitive home loans to people who may not otherwise qualify to take a loan on a home. The FHA recognizes that not all buyers have the excellent credit needed for a traditional home loan and, especially in today's economy, it can be difficult to save up the traditional 20% down payment usually required by these programs. However, before the Missouri FHA loan program came into existence, many buyers were either paying astronomical interest rates, taking out risky adjustable mortgages, or simply not qualifying at all.
Luckily, Missouri FHA loans offer competitive interest rates and have several options, including a fixed rate plan, to ensure that homeownership does not mean financial hardship.
FHA Loan Limits
The FHA doesn't make these loans directly, however. Instead, they provide a guaranty to the bank issuing the loan which makes the loan less risky for the bank and provides a bit of an incentive to make the loan. There are limits on how much money you can borrow on a Missouri FHA loan, so be sure to check with your lender before you get your heart set on a particular home. The minimum changes each year, and in 2009, it totaled $271,050 for a single family dwelling.
If you happen to be in a high cost of living area, the amount adjusts to accommodate the increased housing prices in the area, which ensures that even buyers in more expensive areas can purchase a home. Missouri's limit is pretty straightforward because of the low cost of living in the state, so for most areas, the limit is in fact $271,050. The exception to the rule is in St. Louis, where the limit for 2009 is $281,050, a $10,000 increase. If you're considering buying a multi-family unit with a Missouri FHA loan, the program does permit these types of purchases, but the amount you may borrow may change.