What is
a
FHA Home Loan?
The Department of Housing and Development (HUD), is the federal
department responsible for the major housing programs in the United
States. One of these programs is the FHA (Federal Housing
Administration) loan. The government does not loan the homebuyer
the money, they insure the loan, making it less risky for the lender
to make the loan. The borrower pays the FHA Mutual Insurance,
Mortgage Insurance Premium (MIP).
Not all lenders provide FHA loans, they must be an approved FHA
lender.
Unlike the Veteran’s Administration (V.A.) Loans, which are only
available to veterans and surviving unmarried spouses of veterans
killed in the military, anyone who qualifies can obtain a FHA loan.
One of the advantages of a FHA loan is a low down payment, beginning
at 3% for an owner occupant. Investors who want a FHA loan, will
need to have a 25% down payment. The maximum loan amount varies
throughout the country, depending on which county the property is
located.
The buyer must pay a 1% loan origination fee, which needs to be
paid by closing, and can not be finance. They buyer is not allowed
to have secondary financing for the property, such as a separate
loan to cover the down payment. Yet, the buyer can request that the
seller pay for any FHA points. After the first mortgage has been
acquired, the borrower can apply for second financing.
There is no prepayment penalty for a FHA loan.
FHA loans tend to be easier to qualify for than conventional rates,
and offer a lower down payment. They may also offer lower interest
rates than conventional loans, for some borrowers.
For more information on FHA loans, contact a FHA approved lender.
Other Links of interest
http://www.havasumagazine.com/RE/conventionalloans.htm
http://www.havasumagazine.com/RE/Buying.htm
http://www.havasumagazine.com/RE/Selling.htm
http://www.havasumagazine.com/RE/loans.htm
http://www.havasumagazine.com/RE/VALoans.htm
http://www.havasumagazine.com/RE/FAQ.htm
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