Get an FHA Loan in New Orleans

With an FHA Loan in New Orleans potential homeowners find a trusted partner in their journey. Offering flexible terms, lower down payments, and competitive rates, this loan type is tailored to fit the unique needs of those looking to call the Big Easy their home.

FHA Loan New Orleans

Getting an Federal Housing Administration (FHA) Loan in New Orleans, LA 

FHA Loans are one of the most popular loan programs in New Orleans. The Federal Housing Administration Loan is a great loan program for NOLA homebuyers looking to purchase a home. 

The FHA loan was created by The Department of Housing and Urban Development to spark homeownership for low to moderate-income homebuyers. 

Benefits of an FHA Loan in New Orleans? 

The FHA loan is a great program but is it right for you? Here are a few benefits to consider: 

  • FHA has very flexible credit guidelines
  • Low and bad credit scores are allowed
  • FHA is a low-down-payment program
  • Past credit issues are ok with FHA
  • Below market interest rates

These are just a few of the benefits of getting an FHA Loan in New Orleans. 

What are the cons to getting an FHA Loan?

FHA loans are a great program and if you are looking for a loan program that will make it easy to get a mortgage, especially if you’ve had past financial issues it’s hard to beat. However, it does have some downsides that you need to consider. 

  • Upfront Mortgage Insurance Premium: FHA charges an upfront premium of 1.75% of your loan amount that’s financed into your loan. This can make it more expensive than other loan programs
  • Annual Mortgage Insurance Premium: This is a premium that is charged to you annually and it’s 0.85% of the amount you owe on the loan.  The annual amount is divided up monthly and included in your mortgage payment. 
  • Mortgage Insurance for the life of the loan: The PMI or mortgage insurance stays with the FHA Loan for life. The only way to get out of FHA PMI is to refinance the loan into a conventional loan. 

* A quick note about PMI: PMI gets a bad wrap. Many people talk bad about PMI and tell you that you should avoid it, but keep in mind the only way to do that is to save 20% down! Without PMI you wouldn’t be able to get a mortgage. We think this is a small price to pay to start building equity now. 

New Orleans FHA Loan Requirements

The FHA loan does have a few requirements you need to meet if you are going to be able to use the program.  

  • Minimum of a 580 Credit Score with 3.5% Down Payment
  • Minimum of 500 Credit Score with 10% Down Payment 
  • Monthly Income That is Documented 
  • Must Purchase a Primary Residence 
  • Down Payment Funds That Meet All Sourcing and Seasoning Requirements 

Can I Get An FHA Loan With Past Credit Issues? 

FHA is one of the most flexible loan programs if you’ve had past credit issues. While some loan programs such as conventional loans may not approve you if you have collection or charge-off accounts, FHA can be very flexible. 

FHA allows: 

  • Collection Accounts
  • Charged-Off Accounts
  • Late Payments 
  • Bankruptcies
  • Foreclosures
  • Short-Sale

FHA Does Not Allow:

  • Student Loan Collections 
  • Judgments
  • Past Due Child Support or Child Support in Collections 
  • Any Government Collections or Judgement 

How to Get an FHA Mortgage in New Orleans, LA 

How can you get an FHA Loan in New Orleans? Let’s jump in! 

  1. Contact a local mortgage broker to see your options 
  2. Do a pre-qualification phone call with a loan officer
  3. Complete a mortgage application 
  4. Upload your documents 
  5. Get Pre-Approved
  6. Start Shopping for Homes

We would love to be the expert to help you find the perfect loan. We can shop hundreds of lenders for you, in about 5 minutes, with one credit pull! 

New Orleans FHA Loan Pros and Cons

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