FHA Loans in New Jersey, Pennsylvania & Florida

Plain-English guide

What an FHA loan is

An FHA loan is a mortgage made by a private lender and insured by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD). The FHA doesn't lend money directly. It insures the lender against loss if a borrower defaults, and that insurance is what lets lenders say yes to borrowers who might not fit conventional guidelines yet.

FHA loans are among the most common choices for first-time buyers in South Jersey, Philadelphia's suburbs, and Florida, but you don't have to be a first-time buyer to use one. Repeat buyers and homeowners refinancing can use FHA too, as long as the home will be their primary residence.

Plain English: the government insures the loan, so lenders can be more flexible with you.

Who FHA tends to fit

FHA is often worth a look if any of these sound familiar:

• Your credit score is still being built or recovering from a past setback.
• Your savings for a down payment are modest, or part of your funds will come as a gift from family.
• Your debt-to-income ratio is on the higher side because of student loans or a car payment.
• You want to buy a two- to four-unit property and live in one of the units.

Every lender adds its own requirements on top of HUD's minimums, which is one reason working with a broker helps. If one lender's overlays don't fit your file, I can look at others that may.

FHA mortgage insurance, explained

FHA loans carry two kinds of mortgage insurance premium (MIP): an upfront premium, which is usually financed into the loan, and an annual premium paid monthly with your mortgage payment. Depending on your down payment and loan term, the annual premium may last for years or for the life of the loan. Current premium levels are published by HUD and change from time to time, so I'll show you exact figures on an official Loan Estimate.

Because MIP can stay on the loan, some borrowers use FHA to buy now and later refinance into a conventional loan once their credit and equity improve. That isn't guaranteed to make sense for everyone, but it's a common plan.

Plain English: FHA insurance is the trade-off for flexibility. We'll weigh it against your other options.

FHA loan limits and property rules

FHA sets maximum loan amounts by county, and they're updated each year. Higher-cost counties have higher limits. You can look up any county on HUD's FHA loan limit tool, or I can check it for you.

The home also needs an FHA appraisal. Besides value, the appraiser looks for health and safety issues like peeling paint in older homes, missing handrails, or roof problems. Most homes pass without trouble, and when something comes up, it can often be repaired before closing.

FHA and other upfront-cost options

In New Jersey, FHA can sometimes be paired with down payment assistance options through select lending partners, which I can review with you. Read more on my first-time homebuyer page, or download the free guide below.

FHA vs. conventional vs. VA

If you're an eligible veteran or service member, compare FHA with a VA loan first, because VA loans have no monthly mortgage insurance. If your credit is strong, a conventional loan may cost less over time because private mortgage insurance can usually be removed. See all options on the loan programs page.

Sources: HUD: Let FHA loans help you · HUD FHA loan limits · CFPB: Owning a home

David J. Hutchison II, NMLS #63021 · NEXA Mortgage, LLC dba NEXA Lending, Company NMLS #1660690 · Equal Housing Opportunity

FHA loan mortgage broker in South Jersey

As a mortgage broker, I compare FHA options from multiple wholesale lenders through NEXA Lending. Lenders apply their own credit overlays on top of FHA minimums, so shopping several can help buyers with limited or bruised credit. Learn more about working with a mortgage broker in Burlington County.

Why a mortgage broker? What credit overlays are and why lender choice matters →

David J. Hutchison II, NMLS #63021 · NEXA Mortgage, LLC dba NEXA Lending, Company NMLS #1660690 · Equal Housing Opportunity