Answering FAQS about Using an FHA Loan to Buy a Home in St. George

Are you considering buying a home in St. George and thinking about using an FHA loan? You're not alone. FHA loans are a popular choice for first-time buyers, those with moderate incomes, or anyone who needs a bit more flexibility to make homeownership happen.

As a local real estate expert in Southern Utah, I’ve helped many clients navigate the FHA loan process successfully. Below, I’ll break down the most common questions about FHA loans, about things like who qualifies, what properties are eligible, the benefits and drawbacks, and how it works in the St. George market.

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. It’s designed to help buyers who may not qualify for conventional loans due to lower credit scores or limited down payment funds. Because the loan is backed by the government, lenders are more willing to offer flexible qualification terms.

Who Can Use an FHA Loan?

So who can take advnatage of the beneficial terms offered my an FHA loan? First-time homebuyers are the most common borrowers, but you don’t have to be one. Anyone who meets the FHA criteria can qualify. That includes:

• Buyers with lower credit scores – typically 580 or higher, though some lenders may approve lower scores with larger down payments.
• People with a limited down payment – FHA allows as little as 3.5% down.
• US citizens or legal residents – with steady income and employment history.

In other words, many buyers can qualify to use an FHA loan and they tend to be easier to qualify for than conventional loans. 

What Types of Homes Can You Buy With an FHA Loan?

FHA loans can be used to buy a variety of primary residences in St. George and surrounding communities, including:

• Single-family homes
• Townhomes and FHA-approved condominiums
• Manufactured homes (on permanent foundations)
• Multi-family properties (up to 4 units, as long as you live in one)

FHA loans cannot be used to purchase vacation homes, investment properties, or homes in need of major structural repairs unless using a special 203(k) renovation loan.

Pros of Using an FHA Loan

There are some clear benefits to using an FHA loan to buy your home in St George:

• Low down payment: Only 3.5% required if your credit score is 580 or above.
• Flexible credit requirements: Helpful for buyers working to rebuild credit.
• Assumable loan: FHA loans can be transferred to a new buyer, which may be appealing in a high-interest-rate market.
• Accessible to many: Great option for buyers without a large cash reserve.

Cons of Using an FHA Loan

There are some things to consider before you choose an FHA loan, too, like:

• Mortgage Insurance Premiums (MIP): FHA loans require upfront and monthly insurance payments.
• Property restrictions: Homes must meet minimum property standards and pass an FHA appraisal.
• Primary residence only: No second homes or investment properties allowed.
• Loan limits: There are FHA loan caps that vary by county. In Washington County, Utah, the 2024 limit is typically lower than for conventional loans.

How Do FHA Loans Work in the St. George Market?

St. George is a fast-growing, highly desirable community with a mix of new builds and older properties. Many buyers find FHA loans helpful in this market, particularly for starter homes or for relocating families who need affordability with room to grow.

That said, homes must be in good condition to qualify for FHA financing. I work closely with buyers to identify homes that meet FHA guidelines and can recommend trusted lenders who specialize in FHA loans in the Southern Utah region.

Other Frequently Asked Questions About FHA Loans

• Can I use gift money for the down payment? Yes, FHA allows gift funds from family or close friends.
• Can I buy a fixer-upper? Yes, with an FHA 203(k) loan for repairs or renovations.
• Is an FHA loan my only option? Not necessarily. You may also qualify for conventional, VA, or USDA loans depending on your situation.

FHA loans are a valuable tool for many buyers in St. George, especially if you’re navigating the real estate market for the first time or need a bit of extra flexibility to qualify. We're here to help you get started, so contact us any time!