Ohio FHA Loans – Ohio FHA Lenders 2022
Ohio home buyers who need a small down payment or have poor credit scores may be able to purchase a home with an Ohio FHA loan. There are many Ohio FHA lenders who offer the program, but not all of them participate in all of the FHA loan options available.
We will take you through the Ohio FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified. If you already know that an FHA loan is right for you, then click to connect with an Ohio FHA lender whether you live in Columbus, Cincinnati, Cleveland, Dayton, or anywhere else.
Ohio FHA Loan Requirements for 2022
These are the basic FHA loan requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, an FHA lender can help.
- Down payment of 3.5% or 10% if your credit score is below 580
- 2-year employment history with some exceptions allowed
- Fully document your income for the past two years
- Minimum FICO score requirement of 500 – down payment will vary
- Mortgage Insurance Premium (MIP) is required for every FHA loan
- Maximum debt to income ratio of 43% with exceptions up to 56%
- The home must be your primary residence
- No bankruptcies or foreclosures in the past two years
Ohio FHA Loan Benefits
These are the benefits of an FHA loan versus a conventional loan:
- Lower credit scores permitted
- Lower down payment requirement
- FHA interest rates are lower than conventional rates
- Gift funds allowed
- Seller closing cost contributions are allowed
- FHA loans are assumable
- Co-signers allowed
- Higher debt to income ratios permitted
Top Ohio FHA lenders
These Ohio lenders are just a few options for you to consider. Please note that each lender is different and it is possible that none of these options are best for you depending upon your scenario.
- Mortgage Broker – Mortgage brokers have the ability to shop your mortgage to multiple lenders. The average broker will have at least 2-3 lender options that can help with your FHA loan.
- Large Bank – Home buyers often call their local bank to see if they can help with their FHA loan. Large banks are well known but they may not allow for lower credit scores and they do not always have the best rates.
- Online Mortgage Lender – Online mortgage lenders are used by a large portion of consumers today. In fact, most of the mortgage transactions are happening through an online lender or an online application process. We suggest shopping various online lenders.
Let us help you to find the best FHA lender in your area by completing this FHA loan scenario form with some basic loan scenario information. No credit report will be pulled and we can connect you with the best option.
Ohio FHA Down Payment Requirements
The down payment requirements for an FHA loan is the same in every state. The minimum requirement for an FHA loan is 3.5% of the purchase price. However, if your credit score is below 580, then the down payment requirement will be 10%.
If you do not have the down payment needed, you can also use gift funds from a relative.
Ohio FHA Down Payment Assistance
There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Ohio. Home buyers will need to contact, and arrange for these programs independently. Lenders will accept the funds from these programs for your down payment but they will not arrange for the down payment assistance.
Read our full article on FHA down payment assistance programs.
Ohio FHA Loan Limits
Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences in Ohio for most counties is $331,760. Use this FHA loan limit lookup tool to see what the FHA loan limits are in your county.
Base Ohio FHA Loan Limits
|Single Family||2 Units||3 Units||4 Units|
Visit our FHA loan limits article where you can lookup all of the loan limits for every county in Ohio.
FHA 203k Loans in Ohio
FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. This program is also available in your state and we work with lenders that help with your FHA 203k loan.
If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.
FHA Streamline Refinance in Ohio
The FHA streamline refinance program is available to existing homeowners who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.
For more information, please read our article on the FHA streamline refinance.
Ohio FHA Loan Pre-Approval Process
If you are looking for an FHA loan, there is an optimal process you should follow to get pre-approved.
- The first step is to make sure you have the minimum down payment needed to qualify
- check your credit and try to cleanup anything that is pulling down your scores
- Get a copy of your tax returns for the past two years
- Get copies of your pay stubs for the past month
- Get copies of your last two months’ bank statements
- Speak to an FHA lender about your loan scenario
Speak to a lender early in the process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.
What to Look for in an FHA Lender
We take a few things into consideration when looking at which Ohio FHA lenders we work with. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.
A good FHA lender will have the following characteristics:
- Allow for credit scores as low as 500
- Provide FHA 203k loans
- Offer competitive rates and fees
- Have a great processing and underwriting team
- Work closely with you throughout the loan process
- Communicate well and will provide you with updates along the way
Benefits of Buying a Home in Ohio
Ohio is a great place to own a home and raise a family and almost 12 million people reside in this great midwestern state. You have some larger cities such as Cleveland, Cincinnati and Columbus, but also a large rural geography within the state where you can enjoy the quiet life.
The average home is worth a little over $150,000 and the median income for the state is $56,111. Meanwhile, just under 15% of the population is living below the poverty level.
Homes appreciate in value at a slower rate in Ohio versus some of the states that border the oceans or that are located in the most densely populated cities in the country. Therefore, if you are buying a home in Ohio you are doing it for the quality of life rather than a huge upside in appreciation.
Ohio offers a true four season living but typically does not see too many major storms to interrupt life. You can expect cold temperatures to begin toward the end of October and the warm weather will start to return in the beginning of April.
There are many universities to attend and the state has professional sports teams in both Cleveland and Cincinnati. Many residents of Ohio have the opportunity to enjoy the outdoors while participating in fishing and hunting.
Frequently Asked FHA Questions
Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. Read our article on the bankruptcy waiting period.
Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.
Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.
Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.
Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.