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How an FHA Loan Can Help You Buy Your First Home in Albuquerque

Are you thinking about buying your first home in Albuquerque? If so, you may have heard about FHA loans. This is a popular type of mortgage with first time buyers. What is an FHA loan, and is it right for you?

What Is an FHA Loan?

An FHA loan is a loan guaranteed, or insured, by the government, namely the Federal Housing Administration (FHA). The FHA does not loan the money itself, but instead guarantees that the lender is protected if the borrower defaults on the loan. FHA loans are popular with first time buyers who may have a low credit score or not enough money for a down payment.

Who Can Get an FHA Loan?

If you’re planning to buy your first home in Albuquerque and have a lower than moderate income, an FHA loan might be right for you. Actually, you can use an FHA loan if you meet the criteria, even if it’s not your first home. The home does, however, need to be your primary residence.

FHA Loan Pros

An FHA loan can let you buy a home with a credit score as low as 500, which is far lower than what lenders usually approve. Plus, you can put as little as 3.5% down if you have a score higher than 580. This makes qualifying for an FHA loan much easier for lower income families.

So keep in mind that the lower down payment is usually for those with a higher score. If your score is around 500, you need 10% down. Either way, this is the easiest home loan to qualify for.

You also have flexibility as to the source of your down payment and closing costs. Also, an FHA loan will let the seller pay up to 6% of the loan amount to cover closing costs, as opposed to only 3% in a conventional loan. This can also prove helpful to a first time buyer to seal the deal on a home in Albuquerque.

FHA Loan Cons

If you put down less than 20% on an FHA loan, you will need to pay FHA insurance, which is similar to private mortgage insurance. It can be paid either up front, or as part of your mortgage payment. The upfront cost is 1.75 percent of your total loan amount, and the monthly cost varies based on the amount of your down payment, the length of your loan, and the initial loan-to-value ratio. It could be as low as 0.45% or as much as 0.85% of the loan amount.

How do you qualify?

In addition to credit, down payment, and maximum loan amount requirements, borrowers—and the home in Albuquerque you want to purchase—must meet other criteria:

• You must be a legal resident of the United States, must live in the country, and must be able to show two years of steady, verifiable employment history.
• The property must be the your primary residence. You can’t buy it as a vacation home or rent or lease it out.
• The property must be appraised by an FHA-approved property appraiser.
• Your front-end debt ratio (monthly mortgage payments) should not exceed 31 percent of your gross monthly income. Lenders may allow a ratio up to 50 percent in some cases.

If you want to explore the possibilities of buying a home in Albuquerque with the help of an FHA loan, contact us today. We’d be proud to help you buy your first home in Albuquerque!

Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Contact us today to help you buy or sell your next home in Albuquerque.


4809 MI CORDELIA Drive NW, Albuquerque, NM  $465,000

4 Bedrooms / 3 Bathrooms (2 full, 1 half) / 2765 Square Feet

This spectacular Scott Patrick, updated one-story home is perched high in the desired Andalucia De La Luz community with park & walking trails. This spacious home has soaring ceilings, light filled rooms, a curved wall of windows providing sweeping views of the Sandias, & amazing Sunsets. Beautifully renovated Gourmet kitchen opens to a spacious dining & family rooms. This flowing floorplan is wonderful for entertaining. 4 spacious bdrms or 3bdrm plus an office. Luscious master suite with oversized dream custom closet. The landscaped private courtyard offers more views of the Sandias. Features include gas log fireplace, skylights, generous storage thru-out, good sized laundry room. Convenient access to Coors, Montano, I40 & Cottonwood. Curtains, Ring alarm system & camaras do not convey.

Contact the Sandi Pressley team for additional details! 

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Sandi Pressley

Albuquerque New Mexico Real Estate YOUR SOURCE FOR ALBUQUERQUE REAL ESTATE! Sandi Pressley offers unparalleled service to ALL clients in Albuquerque and surrounding communities in the New Mexico real estate market. Sandi's motto is "Putting You First." Your complete satisfaction with our service and representation is our number one priority. As a native of Albuquerque, Sandi Pressley has been dedicated to serving her client's real estate needs for over 43 years. Sandi has achieved a goal unprecedented by any other Realtor of being the #1 Top Producing Realtor for 36 consecutive years in all of Albuquerque as well as the entire state of New Mexico. She is also the #1 Top Producing Realtor for the entire Western Region and 8th in the Nation with Coldwell Banker National. Sandi Pressley serves the entire Albuquerque New Mexico real estate market including the surrounding communities such as Rio Rancho, Placitas, Corrales, Bernalillo, Northeast Heights, North Albuquerque Acres, Sandia Heights, High Desert, Foothills, Four Hills, UNM, Nob Hill, Ridgecrest area, Uptown area, North Valley, Northwest Heights, Paradise Hills, South Valley, Southwest Heights, Bosque Farms, Los Lunas, Cedar Crest, Tijeras, and all East Mountain areas. Whether you are considering buying a home, selling a home or both, we know these areas inside and out.

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