FHA Loans in Louisiana

3.5% Down. Credit Scores Down to 580. 

Contents

What is an FHA Loan?

FHA Loans are government-insured mortgage loans that allow low to moderate-income homebuyers to purchase a home. The Federal Housing Administration (FHA) does not lend the money, but they ensure the lenders and banks that do. 

FHA Loan Requirements in Louisiana 

FHA Loans require that you have a minimum of 3.5% down payment and a credit score of 580 or higher. If you have a credit score of 500 to 579 you’ll need a 10% down payment in order to qualify. FHA Loans also require you to have stable employment. 

What Credit Score Is Required to Get an FHA Loan? 

FHA has one of the most flexible credit requirements of any loan program. You can get an FHA loan with a credit score as low as 500. Most lenders will require you to have at least a 580 credit score in order to qualify. 

What Down Payment is required for an FHA Loan in Louisiana? 

FHA has two different down payment requirements depending on your credit score. If you have a 580 credit score or higher you’ll only need a 3.5% down payment. If your credit score is 500-579 you’ll need a 10% down payment. 

 

Louisiana FHA Down Payment Assistance 

FHA allows Louisiana homebuyers multiple ways to pay for their down payment. 

  • Grant Programs 
  • Gift Funds
  • Retirement Accounts/401ks
  • Checking and Savings

Let’s talk about two options you have for down payment assistance with an FHA loan: 

Grant Programs

Louisiana has many grant programs available for homebuyers. These grant programs will offer to pay your down payment and a percentage of your closing costs.  They are usually provided via a higher interest rate or second mortgage that is taken out on the home. 

Grant programs also often require you to have a credit score of at least 640 and make under a certain income limit, usually the median income limit for your area. 

Gift Funds

Gift funds provide another opportunity to receive help with your down payment and closing costs. FHA allows for 100% of your down payment funds and closing costs to be paid with a gift. 

When using gift funds it’s important to remember that it must actually be a gift and you cannot be given the money with any expectation of repayment. 

Gift funds can be provided by an employer or family member, they cannot be provided by someone who is a party to the transaction. So your realtor, seller or lender cannot provide you with any of your down payment funds, but sellers can pay your closing costs. 

FHA Loan Pre-Approval Process in Louisiana 

In order to get pre-approved for an FHA loan you’ll need to: 

  1. Meet with a loan officer
  2. Complete an application 
  3. Upload your loan documents 
  4. Review your options 
  5. Get Pre-Approved

What To Look for in a Louisiana FHA Lender 

When working with any lender you’ll want to make sure that you are using someone who is knowledgeable about loan programs but also your location. They should understand your market, and be able to prepare you for buying a home. 

Working with a lender who has multiple options can help you ensure you get the best deal and the lowest fees. 

FHA Loan Debt-to-Income Ratio 

FHA loans typically require you to have a debt to income ratio under 50%. Some exceptions can be made to allow higher credit score borrowers to go up to 57% but you should always aim to stay below 50%. Going over 50% puts you at risk if your payment changes of being denied while in process. 

Frequently Asked Louisiana FHA Questions 

How do I qualify for an FHA Loan in Louisiana?

The best way to qualify for an FHA loan is to make sure you have at least a 580 credit score and at least 3.5% of the purchase price of the home saved up. You also need to have a stable employment history. 

What would disqualify you from an FHA loan?

If you have government loans that are in collections, no down payment, or no income these would be a few ways to be disqualified from an FHA Loan. 

What is the minimum credit score for an FHA loan? 

The minimum credit score for an FHA Loan is 500 with 10% down and 580 with 3.5% down payment. 

How long does it take for an FHA Loan to be approved? 

FHA loans don’t usually take any longer to be approved than any other loan, so you should expect to close on your FHA loan in around 30 days. However, closing quickly often depends on how quickly you can get things back to your lender and the complexity of your loan as well. 

How long do you have to keep a house with an FHA loan? 

FHA loans are owner-occupied loans meaning you must live in the property to receive them. FHA requires you to remain in the home for at least 12 months before you can purchase another home. Failure to do this could result in mortgage fraud. 

What is the highest debt to income ratio for FHA? 

FHA will actually allow a debt-to-income ratio of 57% but for most homebuyers, you’ll need to shoot for 50% or less in order to be approved. 

Is Conventional better than FHA? 

Conventional has pros and cons just like FHA. If you can qualify for both, then usually it makes sense to use a conventional loan unless you need more seller concessions. 

Is PMI required for an FHA loan?

PMI is required on FHA Loans and it stays on your mortgage for the life of the loan. FHA PMI never falls off and the only to get rid of it is to refinance into a conventional loan. 

Can you do a 15 year FHA loan?

Yes, FHA has 30-year fixed-rate mortgages and 15-year fixed-rate mortgages

Louisiana FHA Loans for First-Time Homebuyers

  • Because of FHA Loans low down payment and flexible credit requirements, it’s a great program for first-time homebuyers.  If this is your first time purchasing a home and you don’t have a credit score over 680, FHA could be the best option for you. 

FHA allows: 

  • Gift funds to help with down payment
  • Seller concessions to help with closing costs
  • Debt-to-Income Ratio up to 57%
  • Accepts Income Based Repayment Student Loans 
  • Only 3.5% Down Payment or 
  • 10% Down Payment if Your Credit Score is 500-579
So now you know a little about the FHA Loan program. Check out the loan limits for Louisiana buyers below. 

Louisiana FHA Loan Limits

County name One family Two family Three family Four family Median sales price
ACADIA $420,680 $538,650 $651,050 $809,150 $205,000
ALLEN $420,680 $538,650 $651,050 $809,150 $109,000
ASCENSION $420,680 $538,650 $651,050 $809,150 $248,000
ASSUMPTION $420,680 $538,650 $651,050 $809,150 $248,000
AVOYELLES $420,680 $538,650 $651,050 $809,150 $75,000
BEAUREGARD $420,680 $538,650 $651,050 $809,150 $140,000
BIENVILLE $420,680 $538,650 $651,050 $809,150 $75,000
BOSSIER $420,680 $538,650 $651,050 $809,150 $205,000
CADDO $420,680 $538,650 $651,050 $809,150 $205,000
CALCASIEU $420,680 $538,650 $651,050 $809,150 $144,000
CALDWELL $420,680 $538,650 $651,050 $809,150 $86,000
CAMERON $420,680 $538,650 $651,050 $809,150 $144,000
CATAHOULA $420,680 $538,650 $651,050 $809,150 $99,000
CLAIBORNE $420,680 $538,650 $651,050 $809,150 $70,000
CONCORDIA $420,680 $538,650 $651,050 $809,150 $106,000
DE SOTO $420,680 $538,650 $651,050 $809,150 $205,000
EAST BATON ROUG $420,680 $538,650 $651,050 $809,150 $248,000
EAST CARROLL $420,680 $538,650 $651,050 $809,150 $86,000
EAST FELICIANA $420,680 $538,650 $651,050 $809,150 $248,000
EVANGELINE $420,680 $538,650 $651,050 $809,150 $42,000
FRANKLIN $420,680 $538,650 $651,050 $809,150 $89,000
GRANT $420,680 $538,650 $651,050 $809,150 $143,000
IBERIA $420,680 $538,650 $651,050 $809,150 $205,000
IBERVILLE $420,680 $538,650 $651,050 $809,150 $248,000
JACKSON $420,680 $538,650 $651,050 $809,150 $64,000
JEFFERSON $420,680 $538,650 $651,050 $809,150 $296,000
JEFFERSON DAVIS $420,680 $538,650 $651,050 $809,150 $83,000
LAFAYETTE $420,680 $538,650 $651,050 $809,150 $205,000
LAFOURCHE $420,680 $538,650 $651,050 $809,150 $175,000
LASALLE $420,680 $538,650 $651,050 $809,150 $124,000
LINCOLN $420,680 $538,650 $651,050 $809,150 $193,000
LIVINGSTON $420,680 $538,650 $651,050 $809,150 $248,000
MADISON $420,680 $538,650 $651,050 $809,150 $96,000
MOREHOUSE $420,680 $538,650 $651,050 $809,150 $167,000
NATCHITOCHES $420,680 $538,650 $651,050 $809,150 $140,000
ORLEANS $420,680 $538,650 $651,050 $809,150 $296,000
OUACHITA $420,680 $538,650 $651,050 $809,150 $167,000
PLAQUEMINES $420,680 $538,650 $651,050 $809,150 $296,000
POINTE COUPEE $420,680 $538,650 $651,050 $809,150 $248,000
RAPIDES $420,680 $538,650 $651,050 $809,150 $143,000
RED RIVER $420,680 $538,650 $651,050 $809,150 $77,000
RICHLAND $420,680 $538,650 $651,050 $809,150 $103,000
SABINE $420,680 $538,650 $651,050 $809,150 $90,000
ST. BERNARD $420,680 $538,650 $651,050 $809,150 $296,000
ST. CHARLES $420,680 $538,650 $651,050 $809,150 $296,000
ST. HELENA $420,680 $538,650 $651,050 $809,150 $248,000
ST. JAMES $420,680 $538,650 $651,050 $809,150 $296,000
ST. JOHN THE BA $420,680 $538,650 $651,050 $809,150 $296,000
ST. LANDRY $420,680 $538,650 $651,050 $809,150 $90,000
ST. MARTIN $420,680 $538,650 $651,050 $809,150 $205,000
ST. MARY $420,680 $538,650 $651,050 $809,150 $113,000
ST. TAMMANY $420,680 $538,650 $651,050 $809,150 $296,000
TANGIPAHOA $420,680 $538,650 $651,050 $809,150 $180,000
TENSAS $420,680 $538,650 $651,050 $809,150 $74,000
TERREBONNE $420,680 $538,650 $651,050 $809,150 $175,000
UNION $420,680 $538,650 $651,050 $809,150 $167,000
VERMILION $420,680 $538,650 $651,050 $809,150 $205,000
VERNON $420,680 $538,650 $651,050 $809,150 $155,000
WASHINGTON $420,680 $538,650 $651,050 $809,150 $69,000
WEBSTER $420,680 $538,650 $651,050 $809,150 $96,000
WEST BATON ROUG $420,680 $538,650 $651,050 $809,150 $248,000
WEST CARROLL $420,680 $538,650 $651,050 $809,150 $101,000
WEST FELICIANA $420,680 $538,650 $651,050 $809,150 $248,000
WINN $420,680 $538,650 $651,050 $809,150 $179,000

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*We don’t sell or spam your information and you will only be contacted in the manner you choose. This info is for Bayou Mortgage Only