NY FHA Loan Basics
New York real estate tends to come at a premium, so it's not surprising that many people dismiss the possibility of ever owning a home in the state. It's often hard to navigate through the confusing world of mortgage loans which means that some people never own a home. Rather than sift through numerous loan products for your first home, consider researching to see if a New York FHA loan could be the right option for you.
Is an FHA Loan for You?
New York FHA loans are targeted towards first time homebuyers who might not otherwise qualify for a loan. You may be a good candidate if you:
- Are a first time homebuyer
- 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 that your mortgage payment will be equal to or less than 30% of your gross income.
Since the New York FHA loan program is geared towards first time homebuyers, it tends to be a little more relaxed about down payment requirements and about credit requirements. For instance, New York FHA loans only require 3.5% of the purchase price as a down payment at closing and allow borrowers to roll closing costs into the loan. That's a huge help if, due to the economy or other factors, you're one of the many individuals who simply cannot save a large amount of money for a down payment.
New York FHA Loan Limits
New York FHA loans do have a maximum loan value, which means that you can only borrow up to a certain amount on your loan. While the baseline maximum loan value is $271,050 for a single family home in 2009, the good news for those who live in a high cost of living area is that the amount adjusts. For instance, the maximum amount in the Bronx is $729,750 while in Albany, the most you can borrow is $312,500.