FHA MORTGAGE
The program built for buyers who have the income but not a perfect credit file. FHA is government-insured, which lets us approve borrowers a conventional underwriter would decline — and it finances renovation work most loans will not touch.
Including the 203(k), for homes that need work before they qualify.
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FHA exists to widen the door. It is insured by the Federal Housing Administration, which is why lenders can be more flexible than they would ever be on a conventional file.
3.5% down at a 580 score, and 10% down is possible below that. Conventional generally stops at 620 and prices harshly under 700.
FHA has defined, shorter waiting periods after a bankruptcy or foreclosure than conventional does. A bad two years does not have to cost you a decade.
With compensating factors, FHA regularly approves debt-to-income ratios that conventional underwriting will not consider — useful for buyers carrying student loans.
The 203(k) lets you finance the purchase and the repairs in a single loan. In a region with a lot of older housing stock, that is the difference between a house being buyable and not.
FHA files carry more moving parts — appraisal requirements, mortgage insurance math, occupancy rules. The program is only as good as the person running it.
The Arrowood Team offers a $5,000 Closing Guarantee. After a fully underwritten pre-approval we can issue a guarantee certificate, and if the loan does not close, Tim pays $1,000 to the borrower and $4,000 to the seller. Eligibility depends on the transaction — ask us whether it applies to yours, or read the full terms on our Closing Guarantee page.
The national average purchase closes in about 45 days. Our process targets 21 to 30, which is often the difference between winning a house and coming second.
We are at 119 Boone Ridge Dr in Johnson City. Tim Arrowood (NMLS #393468) personally works your file — no transferred queues, no loan officer who has moved on by underwriting.
FHA is not automatically the right answer. If your credit is strong enough that conventional would cost you less over the life of the loan, we will show you that comparison rather than quietly writing the FHA.
FHA is not one product. These are the four we set up most often in the Tri-Cities.
The default. Gift funds from family are allowed for the entire down payment, which matters more than most buyers expect.
Buy a house that needs work and finance the repairs in the same loan, based on the after-improved value. Read the full 203(k) guide before you tour anything that needs a kitchen.
Already have an FHA loan? The streamline needs no appraisal and no income documentation in most cases. See how the streamline works.
Build with FHA terms and a single closing. What to know before you build.
Johnson City and Jonesborough. A lot of the housing stock here predates 1980, and FHA appraisals apply Minimum Property Standards that a conventional appraisal does not. Chipping paint on a pre-1978 home triggers lead-based paint requirements. We would rather tell you that at the showing than after the appraisal comes back.
Kingsport and Bristol. FHA loan limits are set by county and they are not identical across the region. What fits in one county may not in the next one over.
Older homes and the 203(k). The renovation loan is genuinely underused in this market. Houses that sit on the market because they need a roof or a kitchen are exactly what it was designed for, and they are often the best value available to a first-time buyer.
General guidelines. A strong file in one area frequently offsets a weaker one elsewhere.
Somewhere in the grey area? Call (423) 406-1567. We will tell you honestly, including if the answer is “not yet, but here is what would change it.”
1. What credit score do I need for an FHA loan?
580 gets you the 3.5% down option. Between 500 and 579 you may still qualify with 10% down. Those are the FHA floors — individual lenders sometimes add overlays on top. If you are sitting just below a threshold we will tell you what it would take to get across it, because a small score improvement can change your pricing meaningfully.
2. Is FHA or conventional better for me?
It depends almost entirely on your credit. Below about 680, FHA usually wins on both approval odds and monthly cost. Above that, conventional often costs less over the life of the loan because private mortgage insurance can be removed at 20% equity while FHA mortgage insurance generally cannot. We run both and show you the comparison rather than picking for you. See our full FHA guide for more.
3. Does FHA mortgage insurance ever go away?
On most FHA loans written today, the monthly premium stays for the life of the loan. That is the single biggest trade-off against conventional. The usual exit is refinancing into a conventional loan once you have both the equity and the credit to qualify — worth building into your plan from the start rather than discovering it in year four.
4. Can I use gift money for the down payment?
Yes, and this is one of FHA’s real advantages. The entire 3.5% can come from an eligible gift — typically family. It needs a gift letter and a documented paper trail, which we will walk you through. Do not move the money before talking to us; how it arrives matters as much as that it arrived.
5. What is a 203(k) and should I care?
It lets you finance a home purchase and the renovation work in one loan, underwritten against the after-improved value. In a region with this much pre-1980 housing stock, it turns houses that have been sitting on the market into genuinely good buys. It is the most underused loan in the Tri-Cities.
6. Can I buy a rental property with FHA?
No — FHA requires the home to be your primary residence. A 2-to-4 unit property can work if you live in one of the units, which is a legitimate route into owning rental property. For a straight investment purchase you want conventional or a DSCR loan.
Tennessee: Johnson City, Kingsport, Bristol, Jonesborough, Elizabethton, Greeneville, Piney Flats and the surrounding Tri-Cities.
Virginia: Bristol and Southwest Virginia along the I-81 corridor.
Preferred Rate is licensed in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA and WI, and operates under American Pacific Mortgage in NV. The Arrowood Team originates primarily in Tennessee and Southwest Virginia.
119 Boone Ridge Dr, Suite 203
Johnson City, TN 37615
(423) 406-1567
arrowoodteam@preferredrate.com
Fifteen minutes tells you whether FHA or conventional costs you less, and what the monthly payment actually looks like. No credit pull required to start.
NMLS CONSUMER ACCESS LINK: NMLS #1850
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© 2024 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.
Refinancing may result in finance charges that may be higher over the life of the loan. Consult with your loan advisor for details.
Not available in New York. Licensed as Preferred Rate in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA, and WI. Preferred Rate operates under American Pacific Mortgage in NV. AZ BK 1014819. CA #01215943. Regulated by the Colorado Division of Real Estate. Georgia Residential Mortgage Licensee. NV MB 164. Licensed under the Oregon Consumer Finance Act. OK MLO13426.
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The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.” (Source: P.A. 101-657, eff. 3-23-21.)
CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV
