An FHA loan is a type of mortgage insured by the Federal Housing Administration. It is ideal for first-time buyers, though many homeowners may also qualify for the mortgage. You may be wondering about the benefits of FHA vs conventional mortgages, as both offer something different to aspiring homeowners. In short, FHA loans generally come with low-cost down payments, low closing costs and easy credit qualifications.
Conventional mortgages, on the other hand, often require buyers to submit hefty down payments. For this reason, loans distributed by the Federal Housing Administration are attractive to first-time homeowners. The FHA loan requirements are determined annually by the Department of Housing and Urban Development, or HUD. These include meeting credit limits, employment obligations and other stipulations.
Another important requirement of the program is mortgage insurance. Anyone who receives a loan from the Federal Housing Administration must prove they are insured. There are also FHA loan limits in every state; this amount varies based on cost of living, and other state-specific factors. Furthermore, these limits may vary between counties.
Buyers must be sure that the listing price of any houses in which they are interested falls below the limit in that county. The loans offered by the Federal Housing Administration are designed to help Americans afford home purchases. To learn more about the program and to review all of the requirements, limits and costs, continue reading the topics below.
FHA Loans 101
An FHA loan is a mortgage that is backed by the Federal Housing Administration, or FHA. Approved mortgage lenders throughout the nation offer this type of home loan, which helps millions of Americans pave the way toward responsible homeownership.
What is an FHA loan, exactly? This type of home loan makes it possible to purchase a house without needing several thousands of dollars for a down payment. A mortgage is a loaning of funds from a creditor or bank to a homebuyer. In exchange for the loan, the lender charges a certain percentage of interest added onto the monthly payments. It is important for borrowers to understand all the details of this loan before applying. Read More
Types of FHA Loans
Those looking to buy a home may take advantage of many types of FHA loans that make homeownership affordable. Each of the FHA loan programs offers less-stringent underwriting guidelines than a traditional loan. As a result, those who would not qualify for a conventional mortgage have a chance to finance a home, based on a more flexible set of criteria.
Borrowers must apply for these loans through an FHA-approved lender. Lenders with the FHA designation have the in-depth knowledge to underwrite the various types of FHA loans. Not only that, but FHA lenders are required to abide by a standard set of guidelines that ensures all borrowers are evaluated fairly for a loan.
Whether you are looking to purchase a home, take equity or make improvements, there is a loan program that can help. Keep reading for more information on the many FHA loan programs available. Read More
Federal Homeownership Assistance Programs
Programs like HAMP and the HARP mortgage program can aid homeowners who are struggling with mortgage payments, or those potentially facing foreclosure, modify or refinance an existing mortgage, so long as eligibility requirements are met.
Established in the wake of the housing crisis, these programs can provide significant aid and savings to qualifying families. To learn about the benefits of Federal Homeownership Assistance programs, homeowners can download our comprehensive guide today.
However, if you are not yet a homeowner, it is worth noting that the Department of Housing and Urban Development (HUD) has numerous programs that may be able to assist you in the purchase of a home, including reduced eligibility requirements, better loan rates, discounts and more.
Through HUD homes and programs such as Section 184, Good Neighbor savings and USDA, you can review all your options for becoming a homeowner in order to make an informed decision moving forward surrounding this large new step in your life. Read More
HUD counseling is one of the most useful resources at your disposal, no matter where you are in your path to homeownership. The Department of Housing and Urban Development (HUD) provides this service, as well as a wide variety of other programs, to help you buy a home, avoid issues such as foreclosure or reconfigure a loan through the FHA streamline refinance option from the Federal Housing Administration (FHA).
Many HUD resources are free or low-cost, meaning that you can oftentimes get the information you need without having to pay large fees. You can download our guide to FHA loans and additional resources for more information on homeownership assistance from the federal government.
In addition to these resources, fair housing rights are also protected by the HUD. If you believe that you are the victim of discrimination, the HUD provides a way for you to file a complaint and, if necessary, receive representation at a trial if your case goes to court.
As with many other programs, representation under the equal housing opportunity program is provided by the HUD at no cost. Learn more about all of the additional resources the HUD offers below. Read More