The Federal Housing Administration has been offering home ownership assistance since 1934. This program originated to fight off the effects of infamous Great Depression. This was a time when foreclosures and loan default was at an all-time high. An FHA mortgage loan is guaranteed by the FHA and then provided by one of their approved lenders. A direct response due to economic hardship has been to modify the FHA program, so now you have even more good reasons to consider financing through the FHA.
1 – Low closing costs and low rates. FHA loans allow for the seller to pay the closing costs. It can also be paid by a non-profit, a relative, or a government agency. This make home purchasing something you can do with little out-of-pocket expense.
2 – FHA financing enable home-buyers to pay a low down-payment when they purchase their homes. This can be as little as 3.5%.
3 – FHA loans are for more than just single family homes. Qualified borrowers can purchase 1 to 4-unit properties. The homeowner needs to live in one of the units, because FHA loans are strict about being for owner occupied homes. The additional units may then be rented out for offsetting the mortgage cost and to generate income.
4 – Another FHA specialty loan has been designed for help senior citizens stay in their homes. It lets them borrow against their equity to get cash for living expenses. This is known as a ‘reverse mortgage’.
5 – A specialty FHA program exists that allows the costs for buying ‘fixer-uppers’ and then making the repairs to be financed within the mortgage.
6 – Even if you have credit that is not so good you can still qualify. The FHA options do have set minimums in regard to credit scores for everybody, but it usually comes in lower than most other mortgage programs.
7 – Aside from home purchase loans, the FHA has programs offering funds for debt consolidation and refinancing.
8 – The EEM (Energy Efficient Mortgage) was designed to help finance the expenses involved with energy efficient homes and improvements. Home owner may improve their properties and make a positive contribution to the environment.
9 – You can find FHA mortgages all across this country. The maximum amount they will loan depends on the median prices of real estate going from county to county. This means that even homes existing in a more expensive area can qualify.
10 – FHA loans can also be had for modular and manufactured housing. There are programs in place for people who own their land where their homes will be located.
If you want to learn more about FHA loans and to find out if you are eligible, just contact a lender that is FHA approved. Ask about current rates, loan limits, and how the process works to get pre-qualified. Make sure to get several quotes because the rates can vary a bit between lenders. FHA loans are all backed by our Federal Housing Administration. They are available through approved credit unions, mortgage brokers, and mortgage lenders.