The Federal Housing Administration has been operating since 1934, and has been a division of the US Department of Housing and Urban Development since 1965.FHA Mortgages are a popular way for people to buy a home if they would not have otherwise qualified for a traditional loan without the FHA guarantee. HUD and FHA offer a wide variety of grants, loans, and assistance programs not only for applicants with low income, but for applicants living in certain areas and in certain occupations. If you are looking to buy a home and need some assistance, consider contacting the FHA to see what they can do for you.
Not every lender offers FHA loans, and not every lender is approved by the FHA to offer loans. The FHA loan insurance does not guarantee a loan approval, but it can increase your chances of getting approved by a mortgage lender. This does not mean that you won't need a credit check, because you must still meet whatever credit qualifications are set forth by the lender for FHA mortgages.
An FHA loan insurance is attractive to lenders because it translates into much less risk. This does not mean, however, that your loan cannot go into eventual foreclosure if you do not make your monthly mortgage payments in a timely manner.
Mortgage lenders generally prefer a 20% downpayment from borrowers when obtaining a loan, but FHA borrowers can purchase a home with as little as 3% down. Downpayment assistance programs and grants are offered through FHA for:
- Applicants working in certain occupations, such as teachers and firefighters
- First time homebuyers
- Applicants purchasing homes in certain geographic areas
State and local governments often offer similar programs, so don't limit your search for assistance to only the FHA.
FHA offers a wide variety of educational resources for homebuyers:
- First time homebuyer education
- Counseling for buying a home and selecting a loan product
- Avoiding foreclosure
- Information regarding reverse mortgages
The FHA is a valuable resource for potential homebuyers and homeowners alike.