New Loan Limits Help First Time Homebuyers
Utah FHA loan limits have been updated for 2021. According to Casey Hynes in the article “2021 FHA Loan Limits in Utah,” the limits have “increased up to $356,362 and $817,650 for a single-family home, depending on the county.” The differing amounts are based on where homebuyers would like to live – the lower number applying to less expensive areas that are more rural and the higher limit would be for places like Park City and Heber Valley.
The Federal Housing Administration (FHA) insures these FHA mortgage loans in order to protect lenders against potential losses due to a homeowner defaulting on their loan. It is a good option for homebuyers who have less than a 10- 20% down payment or bad credit but would still like to purchase a home.
James Cahoon, a loan officer and business director from Ivory Homes’ preferred lender Momentum Loans, offers some insights into the world of FHA loans, “FHA loans are a great option for first time home buyers, they allow people to purchase their first home with a smaller than average down payment.”
The first of two major benefit of an FHA loan compared to others is the ability to qualify even with a small down payment relative to a buyer’s credit score. The second benefit is that FHA loans require the seller and lender to pay most of the closing costs.
“They are also a great option because if you have less than perfect credit, FHA doesn’t penalize you nearly as much as a conventional loan does and generally speaking a home buyer’s debt to income percentage can be higher, compared with a conventional loan,” Cahoon comments further.
One of the costs associated with an FHA loan for the buyer is that when utilizing one of these loans, the buyer is required to pay a mortgage insurance premium that protects the lender against potential loss.
“All in all,” Cahoon concludes, “FHA loans are a great option for both first time home buyers and for second or third-time home buyers with limited down payments and less than perfect credit scores.”
Ivory Homes continues to support first time home buyers by including them in their workforce housing priority, which sets aside their most affordable homes and reserves them for home buyers in the program.
The benefits not only include access to Ivory’s most affordable homes but also includes landscaping, refrigerator, blinds and $2,000 towards closing costs.
Kevin Carlson, manager of the Utah Workforce Housing Priority at Ivory, says, “The idea is to get first time home buyers into a quality home they can afford and also not have them worry about major expenses like landscaping or a refrigerator that often comes out of pocket for a newly constructed home.”
There are certain requirements for the program, please see an Ivory Homes sales consultant for details.