What Is an FHA Loan?

An FHA loan is a special type of home loan aimed at individuals and families with modest credit scores or those facing difficulties in affording a substantial down payment. Maryland FHA loans are secured by the Federal Housing Administration (FHA) to make buying a home more accessible to those who can’t afford a big down payment or meet credit requirements demanded by other loan types. 

Enhance housing standards and initiate a mortgage insurance system to facilitate home financing. 

These loans are a vital component of the U.S. Department of Housing and Urban Development (HUD) and have gained substantial popularity, especially among first-time home buyers or those with limited savings to put toward a down payment.

The FHA loan in Maryland serves as an alternative to conventional mortgage options. Benefits include the ability to purchase a home with a down payment as low as 3.5% and more accommodating credit requirements compared to conventional mortgages. FHA-approved lenders are more flexible and allow borrowers with past credit issues to attain homeownership. At the same time, FHA loan borrowers will have to pay mortgage insurance both upfront and throughout the life of the loan in exchange for these benefits.  

Prospective home buyers in Maryland should contemplate securing an FHA loan in Maryland after assessing their financial circumstances and homeownership goals.

FHA Loan Requirements in MD

Maryland FHA loans are distributed through private lenders. The FHA establishes key qualification requirements that the lenders must adhere to. Essential requirements for FHA loans in Maryland include the following:

  • Credit score: Griffin Funding will accept credit scores as low as 550 for FHA loans, but a higher credit score will lead to better terms and a lower down payment requirement. 
  • Proof of income: Borrowers typically must provide proof of at least two years of employment history.
  • DTI ratio: Borrowers should aim to have a debt-to-income ratio (DTI) below 43%. This can vary by lender and some may allow for a higher DTI ratio.
  • FHA inspection and appraisal: The property must undergo an FHA inspection to ensure it meets specific safety and habitability standards.
  • Primary residence only: The property being financed must serve as the borrower’s primary residence. FHA loans cannot be used to finance vacation homes or investment properties.

Consider these FHA loan requirements in MD before applying and reach out to a Griffin Funding representative to learn more.

FHA Loan Limits in Maryland

FHA loans in Maryland play a pivotal role in turning the dream of homeownership into a tangible reality for numerous individuals and families. However, there are limits on how much you can borrow using an FHA loan. Each year, the FHA establishes borrowing limits for each county across Maryland.

These FHA loan limits in Maryland can vary based on county. Loan limits tend to be higher in counties with more expensive real estate, and lower in other counties. The FHA also takes into account inflation and trends in the real estate market when establishing FHA loan limits in Maryland and other states. 

For 2024, the FHA loan limit in Maryland is set at $498,257 for a single-family home in most counties. The FHA loan limit rises to $667,000 for most counties in the Baltimore area and to $1,149,825 for counties in the D.C. area. 

Partner With One of the Best Mortgage Lenders in Maryland

Aspiring homeowners in Maryland should consider the FHA loan as a viable choice. Maryland FHA loans are ideal for first-time homeowners, borrowers struggling with credit scores, and those facing challenges in securing a substantial down payment.

Consider applying for an FHA loan with Griffin Funding, one of the best mortgage lenders in Maryland. Griffin Funding offers top-tier FHA loans in Maryland that are tailored for borrowers to make their homeownership dreams reality. Connect with one of Griffin Funding’s representatives today to learn more and explore your eligibility for an FHA loan in Maryland. 

For further understanding and instant support, download the Griffin Gold App and jumpstart your financial planning towards homeownership. With our app, you can easily manage your finances, leverage smart budgeting tools to your advantage, keep up with trends in the real estate market, and more.  

FHA loans present an attractive choice for numerous first-time home buyers and individuals with lower credit scores. If you’re considering an FHA loan for your home financing journey, reach out to a Griffin Funding representative who can guide you through the available options. 

Frequently Asked Questions

What are the advantages of Maryland FHA loans?

 Advantages of Maryland FHA loans include lower down payments compared to conventional mortgages, flexible credit requirements, and competitive interest rates compared with other loan types. Borrowers may be eligible to purchase a home with a down payment as low as 3.5% and with credit scores as low as 550. 

 Maryland FHA loans are government-backed, providing further security for borrowers and lenders. FHA loans are lenient with debt-to-income ratios, accommodating a variety of borrowers. FHA loans in Maryland also allow adding a co-borrower’s income for approval, even if that individual will not be residing in the home. 

How do I apply for an FHA loan in Maryland?

Aspiring homeowners can easily apply for an FHA loan in Maryland through Griffin Funding’s mortgage process. Griffin Funding’s streamlined process identifies the best financing options available and guides borrowers every step of the way.

Griffin Funding’s application process includes an initial meeting to determine the best loan options, assess eligibility, and discuss the path forward. A Griffin Funding loan specialist can help you navigate the loan application, lock in a rate, and get pre-approved.

The application then goes through the mortgage underwriting process before the appraisal and pest inspection. The process concludes with the loan approval and release of funds. Griffin Funding strives to complete the mortgage process within 30 days. 

Are FHA loans in Maryland only for first-time home buyers? 

No, FHA loans are not just for first-time home buyers. Maryland FHA loans are also good options for borrowers with relatively low income, less money for a large down payment, or those with low to medium credit scores. FHA loans can be a great option for doing a cash-out refinance on your home.