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My friend told me that FHA loans are only available for first-time homebuyers. Is that true? I rent now, but I owned a home five years ago when I was married to my first husband. I am remarried now and my husband and I want to buy a place but we may not have enough down payment for a regular loan.

First, FHA loans are available to all borrowers who can qualify and who are financing their primary residence. So you don't need to worry about being a first-time buyer. You and your husband will need to meet a lender's qualifications for an FHA loan, such as a credit score of 620 or 640 or higher, a down payment of 3.50 percent of the home's value and a maximum debt-to-income ratio of 41 to 43 percent. A lender can tell you whether you will be able to qualify now for an FHA loan. If you can't qualify now, a lender can give you advice as to what you need to do in order to be approved, such as improve your credit or save more cash.

If your main concern is that you don't have enough cash for a down payment, you can try several things. FHA loans allow your entire down payment to come from gift funds, so if you have nice relatives with extra money, that could be a great source. Another option is to look into down payment assistance programs from your employer or your state or local government. Sometimes these programs are limited by your income and others require you to be a first-time buyer.

Actually, you are a first-time buyer according to the federal government's definition: you just need to not have owned a home within the previous three years.

Contact an FHA lender to discuss your options for a mortgage approval. Ask your lender to let you know if you qualify for any down payment assistance programs because those often work well along with an FHA loan to make your home purchase affordable.






 
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