What is an FHA Loan?
You've heard the name before, but did you know that a FHA home loan through FHA loan financing is one of
the most popular ways to become a homeowner or refinance an existing mortgage.
FHA is a very popular route for the first time homebody
to take. It is not a program reserved only for first time home buyers. You can buy your third or fourth home with an FHA loan. The
only stipulation is that you may only have one FHA loan at a time.
The Federal Housing Administration (FHA), a wholly owned government
corporation, was established under the National Housing Act of 1934 to improve housing standards and conditions. It's goal was to
provide an adequate home financing system through insurance of mortgages, and to stabilize the mortgage market.
Thanks to the insurance
products FHA helped to pioneer, such as the long term amortizing loan, the nation's home ownership rate has soared to an all time
high of 66 percent as of the third quarter of 1997; well on the way towards the goal of 67.5% by the year 2000.
Today, FHA plays a
critical role in financing for minority borrowers, first time home buyers, borrowers who have troubled credit history, and borrowers
who have little money to put down on a home.
Many Single Family mortgage insurance programs have been streamlined. For instance, the
Section 203(k) purchase and rehabilitation program has been greatly modified. Lenders, Realtors, and nonprofit organizations across
the country have received training on how to make the Section 203(k) program work for them and ultimately for you, the consumer.
FHA - Mortgage Home Loans
- Low Down Payment - 3.5% is usually required
- Will accept lower credit scores than a conventional loan
allow down payment assistance programs
- Great Option for first time home buyers
- Lower interest rates than a conventional
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