What is an FHA Loan?

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 limited only to short term loans ranging from one to five 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 that American dream of home ownership easier, more affordable and attainable to Americans.

There are several notable FHA home loan programs available.

  • Standard fixed rate (FHA 203b)
  • FHA adjustable rate mortgage (FHA 251)
  • FHA 2-1 buydown (FHA 203b, FHA 251)
  • Energy Efficient Mortgages Program

FHA Down Payment Assistance

Saving to buy a home, whether it is a first home or the third, can be a difficult task. For many potential homebuyers, not having sufficient money to cover the closing costs and down payment is the difference between renting and owning a home. However, many non-profit and public charity organizations have been created to assist first time homebuyers, low to moderate-income families and general homebuyers with the purchase of a home.

The down payment assistance is provided in the form of gift funds, which means that the money does not have to be repaid. Though there are several organizations that provide these gifts, the differences among them are minor. Qualified homebuyers can receive between 1percent to 5 percent towards the purchase of the home. The homebuyer may be required to have additional savings in the bank. However, the homebuyer must use an approved mortgage lender, an approved real estate agent and qualify for an FHA home loan.

To learn more about down payment assistance and loan grant programs select from the following:


Payment Problems

Should one fail to pay, FHA insures mortgage loans made by approved lending institutions. The FHA insures a variety of mortgages, including FRMs, ARMs, GEMs and GPMs. Down payments are low – 5 percent or less. The FHA doesn’t set the interest rate on loans it insures, so you’ll need to shop around for the best rate.

The FHA limits the amount it will insure to whichever is less: 95 percent of the local average home price or 75 percent of the loan limit set by the Federal Home Loan Mortgage Corporation, a large buyer and reseller of mortgages.


Veterans Administration Guaranteed Loans (VA)

VA loans have most of the advantages of FHA loans, and then some, but they also have eligibility restrictions. They are available only to veterans of the armed services, those currently in the service and their spouses. VA loans are typically half a percent or more below market rates, and they can be obtained with no money down.

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What is an FHA Loan?
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 limited only to short term loans ranging from one to five 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 that American dream of home ownership easier, more affordable and attainable to Americans.
There are several notable FHA home loan programs available.
Standard fixed rate (FHA 203b)
FHA adjustable rate mortgage (FHA 251)
FHA 2-1 buydown (FHA 203b, FHA 251)
Energy Efficient Mortgages Program

FHA Down Payment Assistance
Saving to buy a home, whether it is a first home or the third, can be a difficult task. For many potential homebuyers, not having sufficient money to cover the closing costs and down payment is the difference between renting and owning a home. However, many non-profit and public charity organizations have been created to assist first time homebuyers, low to moderate-income families and general homebuyers with the purchase of a home.
The down payment assistance is provided in the form of gift funds, which means that the money does not have to be repaid. Though there are several organizations that provide these gifts, the differences among them are minor. Qualified homebuyers can receive between 1percent to 5 percent towards the purchase of the home. The homebuyer may be required to have additional savings in the bank. However, the homebuyer must use an approved mortgage lender, an approved real estate agent and qualify for an FHA home loan.
To learn more about down payment assistance and loan grant programs select from the following:
Nehemiah Program
Ameridream
HART
Partners in Charity

Payment Problems
Should one fail to pay, FHA insures mortgage loans made by approved lending institutions. The FHA insures a variety of mortgages, including FRMs, ARMs, GEMs and GPMs. Down payments are low – 5 percent or less. The FHA doesn’t set the interest rate on loans it insures, so you’ll need to shop around for the best rate.
The FHA limits the amount it will insure to whichever is less: 95 percent of the local average home price or 75 percent of the loan limit set by the Federal Home Loan Mortgage Corporation, a large buyer and reseller of mortgages.

Veterans Administration Guaranteed Loans (VA)
VA loans have most of the advantages of FHA loans, and then some, but they also have eligibility restrictions. They are available only to veterans of the armed services, those currently in the service and their spouses. VA loans are typically half a percent or more below market rates, and they can be obtained with no money down.

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