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How Long Does the FHA Loan Process Take in California?

The Federal Housing Administration (FHA) home loan program offers a number of benefits, including a down payment as low as 3.5%.

Many borrowers who are considering this program have questions regarding the processing timeline. One of the most common question among home buyers is: How long does the FHA loan approval and closing process take in California?

On average, the FHA loan process in California can take around 45 days. That’s based on industry data going back several years. But it can also happen more quickly, especially when there are no underwriting issues or other obstacles to delay the process.

How Long Does the FHA Loan Process Take?

According to data provided by the mortgage software company Ellie Mae (now called ICE Mortgage Technology), the FHA loan process in California and nationwide can take around 45 days. That’s from the initial loan application to the actual funding, which happens on or near closing day.

This is assuming you’ve already found a home, and that you’ve completed negotiations and have a purchase agreement in hand. House hunting can add time onto the process, as explained below.

It’s worth noting that the FHA loan processing timeline is similar to that of conventional mortgages. Some home buyers (and sellers) believe that the FHA approval and closing process takes a lot longer, due to governmental “red tape.” But that’s not entirely true.

For the most part, the FHA and conventional mortgage loan processes work the same way. So the timeline can be similar as well.

That being said, there are some minor differences between government-backed and conventional home loans. For example, a California home buyer using a conventional mortgage can choose whether or not they want a property appraisal. But with an FHA or VA-backed home loan, an appraisal is mandatory.

Despite these variations, all home loans in California take roughly the same amount of time to process (on average). So an FHA-insured mortgage loan won’t necessarily “slow you down,” when it comes to buying a home.

The House Hunting Variable

To recap: The FHA loan process in California can take anywhere from a month to 45 days, on average. That’s from the time you first submit an application, to the final closing and funding process. And it can vary due to a number of factors.

House hunting is one of the biggest variables. After all, you can’t close the deal and receive funding until you’ve actually found a home to purchase.

Consider the difference in these scenarios:

  • If you’ve already found a home, and you have a purchase agreement in hand, you’re ready to move on to the appraisal and underwriting stage. The home will be appraised to determine its current market value. Then, your application file will move along to the underwriter for a thorough review.
  • If you haven’t yet found a house (or even started to look for one), it’s a different timeline altogether. Now you’re adding in the house-hunting process, which could take weeks or months depending on local inventory.

The 45-day time range mentioned earlier is just an average based on years’ worth of mortgage industry data. But the FHA loan process can take longer than that, in cases where the buyer has trouble finding a house. So the timeline partly depends on where you are in the home-buying process.

Keeping the Process on Track

In California, the FHA loan approval and closing process can vary from one borrower to the next, for a number of reasons. Variables that can affect the timeline include: the amount of time spent shopping for a home, underwriting issues (or the lack thereof), and the amount of documents that are needed.

Every home buyer and borrower is unique, so the processing timeline can shift.

As a borrower, you can expedite the FHA loan process by working with an experienced lender and providing all requested information in a timely manner. Staying in contact with your loan officer or other point of contact can also help to ensure a smooth transaction.

Here at Bridgepoint Funding, we go above and beyond to help our clients close on time and with as few hurdles as possible. We’ve been helping California home buyers and homeowners for nearly 20 years, and we know how to keep the process flowing smoothly. So please reach out to us if you’re in the market for a mortgage loan!

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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