Category Archives: FHA

The Only Remaining Low Down Home Loans

The Federal Housing Administration has been helping Americans own their own homes since 1934. In 1934, all Americans were struggling financially due to the Great Depression. Most Americans were renting their homes (if they had a home to live in). Today American’s find themselves in situations similar to our Grandparents and Great Grandparents. Owning or keeping a home can feel like an impossible dream. Today, the FHA remains committed to helping The United States of America be a country of home owners.

You are probably wondering exactly how does the FHA help Americans become homeowners. The FHA does not loan money; it insures the mortgage loan. This means that FHA will pay the lender (bank or mortgage company) if the homeowner cannot. In exchange for this insurance the FHA demands that lenders make mortgages more affordable to the average American. This process allows lenders to confidently lend money to people that might not otherwise be able to obtain a loan.

Benefits to the home buyer:

  •   Easier to qualify
  •   The FHA does not require perfect credit for its home buyers.

In fact the FHA does not require any minimum credit score to qualify. The FHA understands that “life happens” and there are various circumstances that can cause a person to have financial difficulty. Therefore the FHA looks at your overall credit history and takes into account life’s unexpected circumstances when approving your loan.

  • Smaller/ less restrictive down payment
  • The FHA requires only a 3.5% down payment. This is considerably lower than a conventional mortgage. Additionally, on an FHA loan, down payment money can come from many sources, including a gift from a family member or government agency. This can be a huge help, as saving for a down payment is one thing that keeps many people from owning their own home.
  • Low cost
  • In general, due to low interest rates, FHA monthly mortgage payments are more affordable.