You may be looking for a mortgage program which offers low down payments along with reduced closing costs. FHA loans are a government program offered by the Federal Housing Administration which provides borrowers with a better deal. The FHA, part of the U.S. Department of Housing and Urban Development (HUD), works with FHA approved lenders by insuring qualified borrower’s loan. An FHA insured loan allows the lender to offer lower down payments, less closing costs and easier credit qualifications. However, the borrower must first qualify for an FHA loan based on certain requirements.
An FHA loan could be for first time home buyers, homeowners looking to repair or remodel their home, seniors over 62 years old that are in need of financial aid, and even homeowners of mobile or manufactured homes.
First Time Home Buyers
If you have never purchased a home before, the Federal Housing Administration offers down payments of 3.5% of the purchase price. One to four unit properties are eligible with many of the closing costs and fees included in the FHA loan.
Repairs and Remodeling
You may be looking to buy a home that is not in the best condition, the FHA can help. The Federal Housing Administration allows home buyers to bundle the costs of fixing up a home into their loan. For homeowners who would like to remodel their house, an FHA refinance will allow them to roll the costs into their loan.
Senior Financial Aid
Seniors, older than 62, are eligible for an FHA reverse mortgage if their home is paid off or has a low remaining balance. This FHA loan pulls equity from the home but can be used as financial aid for senior living expenses or for recreational purposes.
Mobile and Manufactured Homes
There is an FHA loan available for borrowers who would like to place a manufactured home on their property. Also, FHA loans are available for mobile homes which are, or will be, placed in a mobile home park.
What Are The FHA Loan Requirements?
Although the FHA insures millions of mortgages for single family and multi-family homes, there are certain FHA loan requirements that much be met first. Some requirements are defined by the borrower’s local Federal Housing Administration office, which makes it important to speak with an approved lender for the most current requirements.
FHA Loan Requirements
- Mortgage Insurance Required
- Loan Amount Limits
- Property Appraisal
- Credit Report
- Closing Costs
- Debt to Income Ratio
- Credit Check
Each requirement has different exceptions and FHA loan requirements often change, to keep up with the most current requirements you can visit the FHA website.
FHA loans are great for any buyer who can qualify for the government program. Qualifications do change so the best way to find out if you are eligible is by working with an FHA lender who is approved by the Federal Housing Administration. FHA approved lenders are current with government guidelines and work on assisting borrowers in receiving the right loan for their needs. Since 1934, millions of borrower have trusted FHA loans and utilize the government program to finance their home loans. This is why the Federal Housing Administration insures the most mortgages in the entire world.