With high home prices, more buyers may turn to Federal Housing Administration (FHA) loans in the coming year. These government-backed mortgages are known for their flexible borrower requirements, such as lower credit scores and down payments as low as 3-5%.

However, many sellers and even some agents, have misconceptions about FHA loans, believing they are difficult to work with or that the approval process is more complicated. In reality, agents who regularly assist FHA buyers know that these loans are a solid financing option, providing opportunities for buyers who might not otherwise be able to purchase a home.

FHA loans are not inherently harder to close, and when paired with the right professionals, they can be just as seamless as conventional financing.

A key factor in ensuring a smooth transaction is working with an agent familiar with FHA guidelines and a lender who specializes in FHA mortgages. This helps eliminate many of the perceived hurdles and ensures the loan closes on time.

You can help make FHA buyers more competitive by dispelling these common misconceptions:

MYTH #1: FHA loans are only for buyers with bad credit.

Truth: While FHA loans allow credit scores as low as 500, many borrowers have solid credit. In fact, the average FHA borrower has a credit score of 683, and 80% of FHA applicants have a score of 600 or higher, according to 2024 data from Ellie Mae.

MYTH #2: FHA loans are only for first-time homebuyers.

Truth: While FHA loans are popular among first-time buyers and those with moderate incomes, they are available to repeat buyers as well.

MYTH #3: FHA loans come with higher interest rates#4.

Truth: FHA loans offer competitive interest rates, sometimes even lower than conventional loans. Borrowers with strong credit and larger down payments often qualify for the best rates. Comparing both FHA and conventional loan options is always a smart move.

MYTH #4: FHA loans take longer to close than conventional loans.

Truth: FHA and conventional loans have similar closing timelines. On average, both take about 47 days to close, according to 2024 data.

MYTH #5: FHA loans can only be used for single-family homes.

Truth: FHA loans can be used to purchase a variety of property types, including single-family homes, townhomes, manufactured homes, and HUD-approved condos. They can also be used for multifamily properties with up to four units, as long as the buyer occupies one of the units as a primary residence.

MYTH #6: FHA loans have income limits.

Truth: FHA loans have no income restrictions. Even high-earning households can qualify.

Your buyer’s agent can help make FHA offers more competitive in today’s market by educating you, the sellers, and sometimes, the listing agent about FHA loans.

FHA loans are a valuable financing option that can help many buyers achieve homeownership, yet misconceptions often create unnecessary barriers. By understanding the facts and working with knowledgeable real estate agents and lenders who specialize in FHA mortgages, buyers can confidently navigate the process, and sellers can feel more comfortable accepting FHA-backed offers.

With the right professionals guiding the transaction, FHA loans can close just as smoothly as conventional financing. Educating clients about these realities not only helps buyers find suitable financing but also expands opportunities for sellers, ultimately leading to more successful transactions for all parties involved.

We’d like to connect you with our trusted FHA mortgage specialist.

Each year, homeowners receive a notification of their property tax assessment, which, when combined with the local tax rate, determines how much they owe in property taxes. While this process is meant to fairly reflect a home’s value, assessments are not always accurate. If the valuation is incorrect, homeowners may end up paying more than they should. Fortunately, you have the right to challenge the assessment if you believe it is inaccurate.

Here are some of the most common reasons a property tax assessment may be incorrect:

1. Overvaluation – Assessors estimate your home’s market value, but if they overvalue it, your taxes will be higher than necessary. This can happen if they rely on outdated or incomplete data or if home values in your area have declined since the last assessment.
2. Errors in Property Information – Mistakes in the assessor’s records can lead to an inflated value. Common errors include incorrect square footage, an inaccurate number of bedrooms or bathrooms, or outdated details about renovations and improvements. If the records show more features than your home actually has, you may be paying too much in taxes.
3. Comparable Sales Discrepancies – If similar homes in your neighborhood are assessed at a lower value, your home’s assessment may not be consistent with market trends. Assessors use comparable properties to determine value, but if they fail to factor in differences�such as location, lot size, or condition�it could lead to an unfairly high assessment.
4. Market Value Decline – Real estate markets fluctuate, and if your property’s value has dropped since the last assessment, your tax bill may not reflect the change. Assessors do not always adjust values quickly enough to keep up with market shifts.
5. Damage or Deterioration – If your home has suffered significant damage�such as structural issues, fire damage, or foundation problems�it could be worth less than its assessed value. If these factors aren’t considered, you may be overpaying.
6. Incorrect Classification – If your home is classified incorrectly�such as being assessed as commercial property instead of residential�it can result in a much higher tax bill.
7. Exemptions Not Applied – Many homeowners qualify for tax exemptions, such as homestead, senior citizen, or veteran exemptions. If these were not applied, your tax bill could be higher than it should be.

If you believe your property tax assessment is incorrect, you have the right to challenge it. This typically involves gathering evidence, such as recent comparable home sales, correcting errors in the property records, or providing proof of market decline or damage.

Your real estate agent can be a valuable resource in this process. They can help you find comparable sales data and provide insights into market trends. If you have questions about your property’s value or the process of appealing your tax assessment, reach out to your agent�they’re there to help!