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Selma's affordable housing stock makes FHA loans particularly effective here. Most single-family homes fall well below FHA's Fresno County loan limit of $541,287.
First-time buyers dominate Selma's market, and FHA's 3.5% down payment requirement matches what most local buyers can save. This program opens homeownership to families who'd otherwise rent for years.
FHA Loans in Selma
You need a 580 credit score for 3.5% down. Scores between 500-579 require 10% down, though few lenders approve those.
FHA allows debt-to-income ratios up to 50% with compensating factors. You can qualify earning $4,500 monthly if your total debts stay under $2,250. That includes the new mortgage payment.
You must occupy the home as your primary residence. Investment properties don't qualify. FHA requires two years since bankruptcy discharge and three years after foreclosure.
Local decision guide
Use this guide to connect fha loans eligibility, lender expectations, and local market factors before comparing payment options in Selma.
Selma's affordable housing stock makes FHA loans particularly effective here. Most single-family homes fall well below FHA's Fresno County loan limit of $541,287.
First-time buyers dominate Selma's market, and FHA's 3.5% down payment requirement matches what most local buyers can save. This program opens homeownership to families who'd otherwise rent for years.
You need a 580 credit score for 3.5% down. Scores between 500-579 require 10% down, though few lenders approve those.
Every major lender offers FHA loans, but pricing varies significantly. We've seen half-point rate differences between lenders for identical borrower profiles.
Credit unions serving Fresno County often have competitive FHA rates for Selma buyers. Banks typically charge higher fees. Wholesale lenders through brokers usually beat both.
Lender overlays matter more than the base FHA guidelines. Some won't touch 580 credit scores. Others cap DTI at 45% instead of the full 50% FHA allows.
FHA appraisals kill more Selma deals than credit issues. Older homes need functional heating, no peeling paint, and working appliances. Plan $3,000-$5,000 for repairs if buying a fixer.
Mortgage insurance runs 0.85% annually plus 1.75% upfront. On a $250,000 loan, that's $177 monthly. Budget for it. This insurance never cancels unless you refinance later.
Sellers in Selma routinely cover 6% of the price in closing costs. Use that. Ask for rate buydowns or repairs instead of dropping your offer price.
Conventional loans beat FHA if you have 5% down and a 680+ credit score. The mortgage insurance costs less and cancels at 78% loan-to-value.
USDA loans require zero down for Selma properties outside city limits. Income limits apply. If you're under $103,500 household income, USDA saves you the down payment entirely.
VA loans crush both options for eligible veterans. No down payment, no mortgage insurance, better rates. Always use VA benefits if you have them.
Selma's agricultural economy creates income documentation challenges. Farm workers need two years of steady employment history. Seasonal gaps require written explanations from employers.
Property values vary dramatically between east and west Selma. FHA appraisers use comps within one mile. A home near downtown might appraise differently than one near Highway 99.
Lead-based paint inspections add time to pre-1978 homes. Selma has many older properties. Expect 10-14 extra days in escrow for testing and any required remediation.
You need 580 for 3.5% down. Scores from 500-579 require 10% down, but most lenders won't approve below 580 regardless of down payment.
Only if it meets FHA's minimum property standards. No peeling paint, functional utilities, and safe structure required. Consider FHA 203k for major repairs.
Expect 2-3% of the loan amount. On a $250,000 loan, that's $5,000-$7,500. Sellers can contribute up to 6% toward your costs.
Yes, if the home meets FHA standards. Must be built after June 1976, on a permanent foundation, and classified as real property with the county.
Underwriting takes 3-5 days. Total closing averages 30-35 days. Appraisal delays and repair negotiations add the most time in Selma.