How Can the FHA Help Me Purchase My Home?

There are many benefits and protections that homebuyers get with an FHA-insured mortgage that can’t be found elsewhere:

• Lenders may offer you loan terms to make it easier for you to qualify
• If you’ve had credit problems, even filed bankruptcy, you can still qualify for an FHA loan
• You’ll pay a low down payment, under 3% of the mortgage, and unlike other loan programs, it can be from a gift from a family member, employer or charitable organization
• Low costs with competitive interest rates, since the loan is insured by the federal government
• You’ll have the assurance that you can stay in your home. The FHA has protected consumers since 1934 and provides many options to help homeowners avoid foreclosure.

Be aware that the FHA does not do direct financing or the setting of interest rates on its insured mortgages. It’s always best to compare and contrast mortgages from multiple lenders to get an idea of the best interest rate and terms available for a mortgage. Please contact an FHA-approved lender to learn more and to start the process of applying for a loan.

Which properties can be bought with an FHA mortgage?

FHA-insured mortgages are legally valid for buying or refinancing 1-4 family unit structures (new or existing), condominium units, and manufactured housing units (including mobile homes) that are on permanent foundations.

What is the purpose of this program?

The purpose is for this FHA program to insure a mortgage that a homebuyer can use to buy or refinance a principal residence. While the mortgage is insured by HUD, the federal government department that includes the FHA, the actual funding for the mortgage will come from a lending institution such as a bank, mortgage company or savings and loan association.

Who is eligible?

The borrower is eligible for FHA insurance if he or she fulfills the standard credit qualifications. In this case, he or she is eligible for around 97% financing and can finance the first-time mortgage insurance premium into the mortgage itself. An annual premium will also be the borrower’s responsibility.