Ohio FHA Home Loans – FHA Lenders in Ohio

Ohio FHA Loans

Ohio residents who have a 2 year work history and a down payment of 3.5% can get approved for an FHA loan even with poor credit scores.  There are some basic requirements to qualify for an FHA loans in Ohio which we will explain below and afterwards we can help you to find an FHA lender who can help you locally.

We can help you to find the best FHA lender in Ohio regardless as to whether you live in Columbus, Cleveland, Cincinnati, Toledo or anywhere else in Ohio. Simply complete this loan scenario form and someone will call you back immediately.

What are FHA Loans?

FHA loans are government backed mortgages that are insured by the Federal Housing Administration (FHA).  They are the most popular type of mortgage for first time home buyers because they allow for a small down payment, lower credit scores, and a higher debt-to-income ratio. 

FHA Mortgage Benefits in Ohio

These are just a few of the many benefits that Ohio homebuyers can expect when applying for an FHA loan.

  • FHA mortgages allow for low credit scores as low as 500
  • FHA mortgages require very low down payment of only 3.5%
  • FHA mortgages never have pre-payment penalties
  • You can finance your home with an FHA loan just two years after a chapter 7 bankruptcy
  • With an FHA loan you can use down payment assistance or a gift from a relative for your down payment
  • FHA mortgages help borrowers to find their dream home and are often the choice for first time home buyers
  • Interest rates are sometimes lower vs conventional loans
  • The largest benefit is home affordability for those who cannot qualify for conventional loans.

If you would like to know more about FHA loans or to get pre-approved, complete this short loan scenario form.

Click to get an FHA rate quote in Ohio

Ohio FHA Loan Requirements

These are the basic FHA eligibility requirements to qualify for an FHA loan in Ohio as outlined by the FHA Handbook 4000.1.

  • FHA Employment Requirements– You must have a full two year work history to qualify. If you are self employed, you would need to have owned your business for two years.
  • Residency Requirements – The home you plan to purchase must be occupied as your primary residence. Multi family buildings up to 4 units are eligible as long as you occupy one of those units are your own residence. Investment properties are not allowed.
  • FHA Income Requirements and Documentation – FHA guidelines require you to have the ability to qualify within the FHA debt to income ratio limits. You must also have the ability to fully document your income. The FHA lender will ask for your most recent pay stubs, tax returns and W2’s for the past two years, and bank statements for the past two months. If you are self employed, you will need to also document your income by providing two years of tax returns.
  • FHA Mortgage Down Payment Requirement – The minimum down payment requirement for an FHA mortgage in 2018 is 3.5% with a credit score of 580 or higher. If your credit score is below 580, the a 10% down payment will be required. Read more about FHA down payment information
  • FHA Credit Score Requirement – You can qualify for an Ohio FHA mortgage with a credit score of 580 or more. You may also get qualified with a credit score as low as 500.
  • FHA Mortgage Insurance (MIP) – You will be required to have an FHA mortgage insurance premium (MIP).  You may read more about what this insurance will cost at our full FHA mortgage page.

These are just some of the basic requirements as outlined by the FHA handbook. There are many more specific guidelines and qualification requirements that may help or prevent you from getting approved for an FHA loan.

In addition, not all lenders are the same. Some may impose their own requirements that make it more difficult to qualify. Let us help you to find a lender who can help based upon your specific needs.

Click to connect to an Ohio FHA loan specialist for a rate quote

Types of FHA Loans Available in Ohio

There are multiple FHA loan products available for purchasing or refinancing a home. Not all Ohio mortgage lenders offer all of these but we can help you regardless of what your needs are.

  • FHA Purchase – For the purchase of your primary residence.
  • FHA Refinance – To refinance an existing FHA loan or any type of mortgage into an FHA loan.
  • FHA 203k Rehab – This loan allows you to purchase or refinance your home while also borrowing the money needed to rehab or update the property.
  • FHA Construction Loan – With this program, you can purchase property and also build your dream home all with just one FHA mortgage.
  • FHA Streamline Refinance – This loan will allow you to refinance your FHA loan without an appraisal or income documentation. Read more here.
  • FHA Cash Out Refinance – You can refinance your home and cash out equity up to 80% of the appraised value.

If you have questions about any of these FHA loan products, simply contact us here.

FHA Loan Limits in Ohio

Homebuyers are limited to how much they can get approved for by their debt to income ratio (DTI), but also the loan limits or maximum loan amounts available in each county.

Every year the Federal Housing Administration provides updated loan limits for the following year. The limits are higher for multi family homes than they are for single family homes. Review the Ohio FHA Loan Limits by County See how much you can borrow

List of FHA Lenders in Ohio

These are some reputable FHA lenders in Ohio. Keep in mind this is just a small sampling and they all may have different credit requirements. Some may also do 203k rehab mortgages while others many not. Some lenders accept lower credit scores while most do not. Therefore, we recommend contacting us and we will help you to get approved with the best rate and terms possible.

Keep in mind these are just a few lenders. We also have to mention that there are many national lenders who may actually be the perfect match for you. This is where we can help to remove some of the confusion and narrow it down for you.

FHA Streamline Refinance in Ohio

An FHA streamline refinance is an excellent way to reduce your interest rate and monthly mortgage payment when rates have come down. The following are some of the benefits of an FHA streamline refinance in Ohio.

  • No appraisal needed
  • No credit check required
  • It is okay if your home declined in value
  • Reduced upfront FHA mortgage insurance premium
  • FHA closing costs can be rolled into the loan

When you consider these benefits, an FHA streamline refinance may make a lot of sense for you. The exception to this would be if you already paid down more than 20% of the value. If that is the case, then you possibly would want to look at a conventional loan.

FHA 203k Rehab

The FHA 203k rehab loan is a great program which allows homebuyers to purchase the home with 3.5% down, and also borrow the funds needed to update or rehabilitate the property.

You still need to qualify for the total loan amount based upon your debt and income. The underwriter may ask to see your rehab plan and budget for the project.

The funds can be used to do virtually anything in the home from major repairs to painting and landscaping. What you cannot do is put in a pool, but you can repair a pool of one already exists.

FHA Cash Out Refinance in Ohio

You can use an FHA loan to cash out up to 80% of your home’s equity even if your current loan is not an FHA loan.  This type of refinance requires full documentation and a new appraisal. You must also wait at least 12 months from your last mortgage and have on time payments to qualify.

The cashed out funds can be used for anything including paying off high interest debt, investments, or to update the home. There are no restrictions on what you can use the equity for.

FHA Loan Frequently Asked Questions – FHA FAQ

What is the FHA down payment requirement?
You will need to put down 3.5% for an FHA loan. The down payment is 10% if your scores are between 500 and 580.

Do FHA loans require mortgage insurance?
The FHA recently changed their guidelines and now require all FHA loans to have mortgage insurance regardless as to whether you are putting down more or less than 20%. There is also no way to remove FHA mortgage insurance unless you refinance to a different loan product other than an FHA loan.

Are all Ohio FHA lenders the same?
Not all FHA lenders are the same. Some will allow for very low credit scores, while others prefer to only work with borrowers with better credit. Some lenders also prefer not to do FHA 203k loans which require more paperwork.

Can veterans apply for an FHA loan?
Veterans absolutely can apply for an FHA loan, but they will need to submit a DD form 212 with their application. We believe the best program for veterans is the VA Loan.

What are the FHA mortgage loan fees?
Some of the fees are standard and customary but other fees may vary by lenders. You can expect your closing costs to be anywhere from 2%-5% of the loan amount. We recommend that you contact an FHA lender here to outline all of the fees that may pertain to you.

What is the FHA Loan limit in my area?
The FHA loan limits vary by county. We have an FHA loan limits look up tool here where you can see the loan limits in your area. The FHA loan limits in Ohio will change every year.

Can I get an FHA loan with bad credit?
You can get an FHA loan with bad credit but the down payment requirement may be higher as well as the interest rate.

Can I get an FHA loan on more than one property?
Typically no but there are some circumstances where it would be allowed. For example, if you are moving to a new home at least 100 miles away but may want to hold onto the current property to rent it out, then you can get an FHA loan on your new home simultaneously. This is just one example.

Are gift funds permitted to be used towards the down payment?
You can get a gift from a relative, close friend, your employer, a charity, or a government agency. The gift can cover your down payment and your closing costs too.

How can I apply for an FHA loan in Ohio?
Your first step is to complete this short loan scenario form. A loan officer experienced in FHA loans will contact you the same day.

Is there a minimum credit score requirement for Ohio FHA loans?
The minimum credit score for an FHA loan is 500. Keep in mind that your lender will also look at the activity and account status on your report and may need for you to clear up a few items.

What are the income limits for Ohio FHA loans?
There are no income limits for FHA loans. You can be a high income earner and qualify for an FHA loan.

Can I use an FHA loan to purchase a condominium in Ohio?
FHA loans can be used to purchase a condominium but the condo must meet FHA standards and be approved.

Are there any specific property requirements for Ohio FHA loans?
FHA loans can be used on 1-4 unit properties, condos, townhomes, mobile homes and the property must also be used as the borrower’s primary residence.

How long does it take to get approval for an FHA loan in Ohio?
You can get a pre-approval the same day you complete your mortgage application. A full approval will need to come from underwriting which can take a couple of days.

Are there any down payment assistance programs available for Ohio FHA loans?
There are down payment assistance programs in Ohio but we also have the ability to provide you with lender down payment assistance. This is an easier path to securing the down payment and is included in the lender’s loan package.

Can you buy a foreclosure property with an FHA loan?
You can use an FHA loan to purchase a foreclosure home, but the home will need to pass an FHA inspection and FHA appraisal. This is possible when buying bank owned real estate that is on the multiple listing service. However, if it is being sold at auction, it becomes more complicated because in that situation you cannot back out of the transaction due to a failed inspection.

FHA Mortgage Facts – Ohio

1. Ohio FHA loans are mortgage loans insured by the Federal Housing Administration (FHA) that are available to homebuyers in Ohio.
2. These loans require a lower down payment compared to conventional loans, making them more accessible for first-time homebuyers.
3. Ohio FHA loans have flexible credit requirements, allowing individuals with lower credit scores to qualify.
4. Ohio borrowers can use an FHA loan to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums.
5. The interest rates on FHA loans are typically competitive and offer options for both fixed-rate and adjustable-rate mortgages.

FHA Mortgage Statistics in Ohio

1. Over 25% of homebuyers in Ohio utilize FHA loans for their mortgage financing.
2. The average down payment for an FHA loan in Ohio is approximately $7,000.
3. Approximately 60% of FHA borrowers in Ohio are first-time homebuyers.
4. In Ohio, FHA loans have an approval rate of over 85%, making them a popular choice among borrowers.
5. In the past year, more than 15,000 FHA loans were granted to Ohio residents, helping them achieve homeownership.