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FHA Loans Kansas City

FHA Loans Kansas City is insured by the Federal Housing Administration (FHA). FHA loans are designed to help low to moderate-income borrowers who are unable to make a large down payment.

FHA loans have been helping Kansas City home buyers since 1934, whether the first loan or their fourth. We are Mortgage Lenders in Kansas City and have offered FHA Loans in Kansas City since 1997.

What to Look for in the Best FHA Lenders

What are the benefits of FHA?

FHA loans help first time home buyers, seniors, or others with credit limitations. The benefits are:

  • Low down payment as low as 3.5%
  • Fixed and Adjustable-Rate Mortgage available
  • Offer a low mortgage interest rate
  • Terms from 10 to 30 years
  • A lower credit score is acceptable
  • Offers a low-down payment
  • Available for Home Purchase and Mortgage Refinance transactions
  • Owner Occupied residences only

7 Benefits of FHA Home Loans You Might Not Know About

How do I apply for an FHA Loan?

You can apply online for FHA loans and receive your mortgage pre-approval letter within one business day. Get started on your Metropolitan Mortgage application today:

Apply Now >

Mortgage Rates for FHA Loans

  • Fixed Rate FHA Loan – Metropolitan Mortgage offers FHA loans as 30-year and 15-year fixed rate mortgage options. Both FHA loan terms offer the same interest rate stability. However, with the shorter FHA loan term comes higher monthly payments. Giving you a faster way to build up home equity. As a result, you can use this higher equity as a down payment when you move to your next home.

See how they compare to a conventional loan: FHA vs Conventional Loans

  • Adjustable FHA Loan – An FHA adjustable rate mortgage (ARM) lets Kansas City homeowners pay a low introductory interest rate for the first few years, resulting in a lower loan payment. In addition, these types of FHA loans are best for shorter terms of home ownership.

See todays FHA mortgage rates

FHA Home Loan Requirements:

Federal Housing Administration Logo

What is the Minimum Down Payment for a FHA Loan?

An FHA loan allows you to finance up to 96.5% (loan-to-value) of the appraised value in Kansas and Missouri. In fact, the 3.5% down payment requirement can come from a gift or a grant. This makes FHA loans attractive for first-time home buyers in Kansas City.

See FHA Loan Calculator

Eligible sources for the down payment

The down payment must come from the borrower’s own funds or Gift funds. Therefore you can’t take out a loan for the down payment.

Gift funds can come from the Borrower’s Family Member, employer or labor union, close friend with a clearly defined and documented interest in the borrower. In addition, a charitable organization, governmental agency or public Entity that has a program providing homeownership assistance to low- or moderate-income families or first‐time homebuyers.

Cash on Hand is not an acceptable source of donor gift funds. You must document the Gifts funds with a satisfactory executed gift letter, evidence of transfer from the donor to the borrower. Additionally, a copy of the donor’s bank statement showing the withdrawal from the donor’s account.

2022 Kansas FHA Loan Limits

In summary, the maximum Kansas FHA loan limits for Kansas City are:

  • $389,850 loan amount for a one-family property
  • $499,050 loan amount for a two-family property
  • $603,250 loan amount for a three-family property
  • $749,700 loan amount for a four-family property

FHA Maximum Loan Amount Lookup

Minimum Credit Score

The minimum credit score for FHA loans is 640 (FICO Score), this is based upon the middle FICO score of the three credit bureaus (Experian, Trans Union and Equifax).

Debt-to-Income Ratios

A debt-to-income ratio (DTI) is used to determine qualification. This DTI is the total monthly housing expense plus debt obligations divided by the total gross monthly income. This Debt-to-income ratio is one-way mortgage lenders measure your ability to manage the payments. Generally, the maximum DTI is 45% and up to 55% with compensating factors.

Strong compensating factors are great credit scores, job stability, and cash reserves. To see how much you can qualify for, get started on mortgage pre-approval.

Mortgage Insurance (MIP) for FHA Insured Loan

Mortgage insurance is a policy that protects fha lenders against losses that result from defaults on home mortgages. FHA requires both upfront and annual mortgage insurance for all borrowers, regardless of the amount of down payment.

2022 MIP Rates for a FHA Loan Over 15 Years

If you take out a typical 30-year mortgage or anything greater than 15 years, your annual mortgage insurance premium (aka private mortgage insurance) will be as follows:

Base Loan Amount LTV Annual MIP
≤ $625,500 ≤ 95% 80 bps (0.80%)
≤ $625,500 > 95% 85 bps (0.85%)
>$625,500 ≤ 95% 100 bps (1.00%)
> $625,500 > 95% 105 bps (1.05%)

2022 MIP Rates for a FHA Loan Up to 15 Years

Homebuyers who can afford to pay off their loans quicker and opt for a shorter term, such as a 15-year mortgage, will benefit from lower mortgage insurance premiums (aka private mortgage insurance), as follows:

Base Loan Amount LTV Annual MIP
≤ $625,500 ≤ 90% 45 bps (0.45%)
≤ $625,500 > 90% 70 bps (0.70%)
> $625,500 ≤ 78% 45 bps (0.45%)
> $625,500 78.01% to 90% 70 bps (0.70%)
> $625,500 > 90% 95 bps (0.95%)

Current Up-Front Mortgage Insurance Premium

The UPMIP (up front mortgage insurance premiun) is currently at 1.75% of the base loan amount. This applies regardless of the amortization term or LTV ratio.

Eligible Properties

There are many types of properties are eligible for financing in Kansas City, for Example:

  • Primary residence single-family homes – 1 to 4 unit
  • Attached and Detached Planned Unit Developments (PUD’s) which typically consist of detached homes within a homeowner’s association.
  • Condominiums
  • Manufactured homes (loan limitations apply)

FHA Maximum interested party contributions

The maximum contribution you can receive is 6% of the property’s sales price. The contributions can only be used towards your actual closing costs, prepaid expenses, discount points, and other financing concessions.

FHA streamline refinance

Streamline refinance refers to the refinance of existing FHA loans and requires limited credit documentation and underwriting. Therefore, this type of FHA refinance is available under credit qualifying and non-credit qualifying options. “Streamline refinance” refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction.

The basic streamline requirements are:

  • The mortgage to be refinanced must already be FHA insured.
  • The mortgage to be refinanced must be current (not delinquent).
  • The refinance results in a net tangible benefit to the borrower.
  • Cash in excess of $500 may not be taken out on mortgages refinanced using the FHA mortgage refinance process.

Kansas City Lenders may offer these refinances in several ways. Some FHA lenders offer a “no cost” refinance (actually, no out-of-pocket expenses to the borrower) by charging a higher mortgage rate of interest on new home loans, rather than if the borrower financed or paid the closing costs in cash. The lender receives a premium from the higher mortgage rate, which enables them to pay your closing costs that are incurred on the transaction. FHA loans do not allow lenders to include closing costs in the new mortgage amount of a streamline refinance.

Investment property (properties that the borrower does not occupy as his or her principal residence) may only be refinanced without an appraisal.

10 Things You Should Know About FHA Loans

Other Popular Loan Options:

Explore all the Loan Options that are available:

Have Questions? Speak with a Loan Officer in our Kansas City or Overland Park location today at 913.642.8300 or apply online:

Apply for FHA Loan Online

**Metropolitan Mortgage Corporation in Overland Park is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.

Find us locally

Find us in Overland Park

7381 W 133rd St #200,
Overland Park, KS 66213

Monday Friday
8:30am – 5:30pm

Find us in Kansas city

7280 NW 87th Terrace Suite 200
Kansas City, MO 64153

Monday Friday
9:00am – 5:00pm

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