FHA Home Loans

An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations.

FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans are generally market rates, while down payment requirements are lower than for conventional loans.

An FHA loan is a government-insured loan subject to certain qualifications and restrictions. FHA provides mortgage insurance on loans made by approved lenders. The cost of mortgage insurance is paid by the homeowner as an up front amount that is usually financed into the loan amount, as well as an additional amount that is included in the monthly mortgage payment. Subject to credit approval.

Some of the other benefits of FHA financing:

  • Only a 3.5 percent down payment is required.
  • Closing costs can be financed.
  • More flexible underwriting criteria than conventional loans