The Federal Housing Administration (FHA)
Making Homes Affordable
The federal government plays an active role in encouraging homeownership in the United States. However, it is not in the business of lending money directly to individuals to buy homes. Instead, it works with an approved network of lenders to make home loans affordable for a larger pool of borrowers.
The Federal Housing Administration (FHA), which is part of the Department of Housing & Urban Development (HUD), is the main government agency charged with this initiative. The primary purpose of the FHA is to promote homeownership by insuring mortgage loans made by approved lenders.
In other words, the FHA promises to repay these lenders should borrowers default on their loan obligations. This, in turn, reduces the risk incurred by these lenders - which encourages them to offer more favorable loan terms to borrowers. In many cases, FHA loans require lower down payments and closing costs than most conventional loans and often feature less stringent credit requirements.
FHA-insured loans open the door to more buyers looking to achieve the American Dream of homeownership. They also serve as an important resource for those wanting to gain more value from the homes they already have.
Is an FHA-Insured Loan Right for You?
Of course, the answer to this question will depend on your individual situation. However, the FHA backs loan programs designed to suit the needs of a large range of borrowers.
Here are a Few Loan Programs Insured by the FHA:
It is important to note that each of these programs has its own set of qualifying requirements, such as income limits, purchase price limits and where the home is located. In addition, factors such as the borrower’s age, home buying history, military record and overall creditworthiness can also play a part in the approval process.
As always, no single loan is right for every individual in every situation. Therefore, it is important to talk to an experienced FHA-approved loan professional to find the right mortgage program for you.
Ready to Get Started? Contact a Qualified FHA Mortgage Specialist Today!