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"FHA HOME LOANS ::: FHA MORTGAGES"
FHA stands for the Federal Housing Administration. It was
developed by the government to stimulate the housing market when
interest rates were incredibly high and activity was low. Today,
the FHA merely oversees the insuring of loans for lenders who want
to help people like us.
Did you know that you need absolutely no credit history to
get an FHA loan? If you do have a credit history, it doesn't
even have to be perfect or stellar. Generally, you can get into an
FHA loan with 3% down. This money can come from yourself, your
immediate family, or even a special non-profit program which
"donates" your 3% down money.
Because the seller can contribute up to 6% of the sale of a
home, you can even have all your closing costs paid for! What we
are talking about here is getting
into a home with no money down. Even better still, you can
use some of that money to "buy down" your interest rate
for up to three years. This means you will have a lower payment!
With some fancy accounting, almost anyone can get into a home.
"Brief FHA History "
In 1937, under an act of Congress, the Federal Housing
Administration was established to provide American families with a
unique opportunity to become homeowners. Formerly, a homebuyer's
options were only limited to short term loans ranging from 1 to 5
years in term. Borrowers had to put as much as 40 to 50 percent
down on the property and pay off the entire loan balance by the
end of the term. FHA revolutionized the mortgage industry at the
time by offering the 30-year mortgage and made the possibility of
home ownership available to Americans nationwide. Throughout the
years, a variety of programs have spawned from this revolution to
make home ownership easier, more affordable, and attainable to
Americans.
Though HUD is not a direct lender, it is the Department's
responsibility to maintain an ongoing program designed to monitor
the overall quality of loans originated from HUD approved lenders.
HUD is an insurer of loans, protecting lenders against potential
losses suffered from default and foreclosure. The "mortgage
insurance premium" collected from the borrower on each loan
helps defray costs associated with this program.
If you would like to find out more information or to see if you
would qualify for a FHA loan program. Please take the time to fill
out the application
to get the process started or contact our department at
FHA Loan Information
FHA, also known as the Federal Housing Administration, operates
under the control of the Department of Housing and Urban
Development (HUD) and has the primary responsibility for
administering the government home loan insurance program. This
program allows buyers who might otherwise not qualify for a home
loan to obtain one because the risk is removed from the lender by
FHA.
The most popular FHA home loan program nationwide is the 203(b)
FHA home loan (see below) that only requires a minimum of 3% from
the borrower and permits 100% of their money needed to close to be
a gift from a relative, non-profit organization, or government
agency.
The main advantage to a FHA home loan is that the credit
criteria for a borrower are not as strict as FNMA or FHLMC.
Someone who may have had a few credit problems should not have a
problem obtaining FHA financing. Also, FHA
home loans are assumable, allowing a person to take over the
mortgage without the additional cost of obtaining a new loan. In
addition, the seller must pay for part of the
"traditional" closing costs (called non-allowable costs)
while a borrower's allowable costs can partially be wrapped into
the loan. 100% of the down payment and closing costs can be
gifted.
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