If you’re looking to buy a home in Dallas, but aren’t able to qualify for a conventional loan, you may be able to purchase a property with an FHA loan.
FHA loans are insured by the Federal Housing Agency, and they help people with lower credit scores secure funding to purchase a home. Homes bought with FHA loans must fall within the FHA loan limits, and both the property and the buyer must meet the FHA’s requirements.
Here’s everything you need to know about FHA loan limits and buying a home with a mortgage insured by the Federal Housing Agency.
To borrow an FHA loan, you must have a credit score of at least 500. If your credit score falls between 500 and 579, you will be required to put at least ten percent down on your home.
FHA borrowers with credit scores of 580 or above only have to put 3.5% percent down. However, making a larger down payment will reduce the amount of interest you pay on your FHA loan.
To qualify for an FHA loan, you can not have a debt-to-income ratio above 50%. Some lenders may require you to carry even less debt, so it’s important to eliminate as much debt as possible before applying for the loan.
Borrowers from all income levels may apply for an FHA loan but must not carry any federal debt or debt on a previous FHA loan.
FHA loan limits tend to fall between $356,362 and $822,375 across the board, but in high-cost areas like Dallas, the limits range from county to county. Although the limit for FHA loans in this area is high, it’s important to shop around and consider the median home prices in each county.
Stay within your budget and don’t take out a loan larger than you can pay back.
Below is a breakdown of the loan limits and median sale prices in each county. Some counties in Dallas are more affordable than others, so you may want to consider this when shopping for a home here.
Collin County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Dallas County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Denton County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Ellis County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Hood County
Minimum: $356,362
Median Sale Price: $229,000
Maximum: $822,375.00
Hunt County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Johnson County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Kaufman County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Parker County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Rockwall County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Somervell County
Minimum: $356,362
Median Sale Price: $235,000
Maximum: $822,375.00
Tarrant County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Wise County
Minimum: $411,700
Median Sale Price: $358,000
Maximum: $822,375.00
Choosing a lender wisely is just as important as being selective when shopping for a home. Lenders come with fees and requirements, so you must be ready and willing to shop around and negotiate.
If you have a credit score that’s on the lower end, you may have trouble finding an affordable lender. While the Federal Housing Agency only asks for a credit score of 500, many lenders will expect a higher credit score.
Raising your credit score before shopping for a lender will open up your options and make it easier to negotiate on fees.
When you borrow money to purchase a home, you can’t go out and purchase any old property. The Federal Housing Agency has specific requirements for the property you purchase with the loan and its use.
Before you can purchase a home with an FHA mortgage, it must pass an appraisal. You must also intend to make the property your primary residence within 60 days of settlement, and you can’t use your Federal Housing Agency loan to flip a property or buy an investment.
After you buy the home, you have to title it in your name or a trust.