FHA Mortgages
FHA loans are insured by the Federal Housing Administration, which means lenders are offered protection by the federal government in the event that a buyer cannot pay their loan. This allows lenders to offer loans with better terms to buyers, which means increased home ownership and a better economy overall.
Federal Housing Administration
The Federal Housing Administration provides mortgage insurance on loans made by FHA-approved lenders in the United States. As one of the largest insurers of mortgages in the world, the FHA has insured more than 46 million mortgages since it was created in 1934.
FHA Loans
FHA loans are insured by the FHA. They are popular among first time home buyers because they allow lower down payments for qualified buyers. Buyers do not need to have the traditional 20% down payment available, and may be able to procure a loan with a down payment as low as 3.5%.
Pros of FHA Loans
- down payment as low as 3.5%
- flexible credit, income, and down payment requirements
- 100% gifted down payment
- seller and/or realtor closing costs permitted (up to a certain percentage based on the loan amount and down payment.)
- includes a mortgage insurance premium
- fixed and adjustable rate mortgages available
- choose between 15 and 30-year fixed rate terms
- co-signer(s) permitted
- ideal for single family, townhomes, condos, and manufactured homes
FHA Ideal Candidates
- first-time home buyers
- borrowers lacking a sufficient down payment
- borrowers lacking an extensive credit history
- borrowers with lower incomes
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