Are FHA lending terms the same everywhere???

2 Replies

Hello BP. I am in the process of applying for financing and was wondering will all mortgage companies I go to that do FHA lending all have the same terms? Is it worth the time to go to several different lenders when looking for FHA loan?

FHA guidelines and rates themselves are set by FHA. However, different lenders may have tighter restrictions (overlays) and different loan processing fees. The larger banks are typically the worst.

Originally posted by @Jared Baker :

Hello BP. I am in the process of applying for financing and was wondering will all mortgage companies I go to that do FHA lending all have the same terms? Is it worth the time to go to several different lenders when looking for FHA loan?

@wayne brooks is right. Overlays are the difference between what a bank like Capital Bank here in the DC area or Bank of America will do for you and what a Carrington Mortgage will do. Capital Bank will go down to a 640 score (I think BofA will go there too) and Carrington will go to 525. They base those decisions on default ratios generally. FHA allow a 3.5% down payment down to a 580 middle score and they want 10% down below that. Pricing for the lower credit scores is higher for obvious reasons.