The Federal Housing Administration, generally known as the “FHA” offers homeowners the ability to purchase a home very easily. FHA Loans may only be issued by FHA Lenders who are more comfortable giving FHA Loans due to the fact that the mortgage is federally insured.
In order to apply for the FHA loan you may want to check our FHA Requirements page to know whether or not you’re able to qualify. You may also want to visit What is FHA? in order to get a more in-depth understanding of what FHA is and how it may affect your home buying process.
Benefits of FHA Loans
- No credit history required–although your lender will likely require that you have at least bad credit history before granting you any credit.
- FHA Loans are probably the easiest kind of loans to obtain simply because they are structured to allow first time home buyers to get into a home (you can qualify though even if you’re not a first time home buyer).
- FHA Requirements will expect a very small, or no down payment.
- FHA does not supply the loan it simply insures the loan.
- Extremely low mortgage insurance. << This is no longer the case, FHA actually has some of the highest mortgage insurance at the moment. Although most believe they will bring it down again shortly.
- Low closing costs.
- Getting an FHA Refinance is extremely simple especially if you decide to get an FHA Streamline.
Types of FHA Loans
The FHA Fixed Rate Loan is the most common of FHA Loans due to the simplicity. The FHA Fixed Rate mortgages are also known as a 203(b). A Fixed Rate Mortgage basically explains itself– the rate of the mortgage is fixed and never changes. For example, if you get an FHA Rate of 6% for your mortgage it will stay at 6% until you decide to get an FHA Refinance.
The FHA ARM is a mortgage which has an interest rate that is flexible and the flexibility is defined by the lenders initial contract. FHA Adjustable Rate Mortgages are also known as a section 251 loan. If you have the FHA ARM and your current interest rate is 6.25%, your rate could could go up or down if your income increases or decreases.
An FHA Reverse Mortgage also known as a Home Equity Conversion Mortgage or (HECM) is a loan program offered to U.S. citizens ages 62 and older. This is a great program for senior citizens who have equity in their home and are looking to get additional cash for retirement. The FHA Reverse Mortgage program is a program that simply gives or lends money to senior citizens based on the collateral of the homes equity.
FHA Home Improvement Loans are also known as FHA Rehab Loans or Section 203(k). Section 203(k) insurance enables home buyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.
FHA Condo Loans, also known as section 234(c), are loans designed to assist homeowners who seek to purchase a condominium. The condos you’re attempting to get into must contain at least 4 attached or detached living dwellings.
FHA Energy Efficient Mortgages provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage. The mortgage loan is funded by a lending institution such as a mortgage company, bank, savings and loan association, and the mortgage is insured by the FHA.
The FHA Graduated Payment Mortgage is a mortgage intended for low-income borrowers who are expecting to have an increase in wages. FHA Graduated Payment Mortgages are also known as a Growing Equity Mortgages.