FHA - Federal Housing Administration Guaranteed Loans

FHA - Federal Housing Administration Guaranteed Loans


An FHA insured loan is a Federal Housing Administration mortgage-insurance-backed mortgage loan, which is provided by a FHA-approved lender. FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal, including:


• Low down payments
• Low closing costs
• Easy credit qualifying


The program originated during the Great Depression, when the foreclosure rates and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance. Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers. Over time, private mortgage insurance (PMI) companies came into play, and now FHA primarily serves people who cannot afford a conventional down payment or otherwise do not qualify for PMI. The program has since been modified to accommodate the recent recession.


Are you buying your first home?

FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.


Do you want a fixer-upper?

FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.


Are you a senior that needs financial help?

  • Are you 62 or older?
  • Do you live in your home?
  • Do you own it outright or have a low loan balance?

If you can answer "yes" to all of these questions, then the FHA Reverse Mortgage might be right for you. It allows you convert a portion of your equity into cash.


Do you want to make your home more energy efficient?

You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.


Are you considering buying a manufactured or mobile home?

Yes, FHA has financing for mobile homes and factory-built housing. They have two loan products – one for those who own the land that the home is on and another for mobile homes that are, or will be, located in mobile home parks.


FHA Refinance

FHA refinancing is ONLY available to homeowners who are currently using their home as their principal residence.


FHA options to homeowners who are considering an FHA refinance mortgage:


  • FHA Cash-Out Refinance

This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A Cash Out refinance allows homeowners to refinance their existing mortgage by taking out another mortgage for more than they currently owe.


  •  FHA Streamline Refinance

This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and often times without an appraisal. FHA Streamlined Refinance also cuts down on the amount of paperwork that must be completed by your lender, saving you valuable time and money.


  • Rules for FHA Streamline Refinancing Loans:

The FHA Streamline Loan option features reduced paperwork and faster processing than the initial FHA loan application, but these loans don’t permit money back to the borrower as they are designed primarily to give lower payment or interest rates.


  • FHA Streamline Refinancing Rules for Adding/Removing Borrowers:

If a borrower is getting a divorce, for example, refinancing the property under a single person’s name (removing the spouse) would make sense. The reverse is true for a single borrower who is refinancing and getting married.


  • FHA Refinancing and Ownership Issues:

One of the most frequently asked questions about refinancing is connected ownership of the home and who is listed on the FHA loan. According to the FHA, the rules allow anyone with ownership of the property (legal title) may apply for FHA refinancing.


Please contact us for more information on FHA guaranteed loans


“These materials are not from HUD or FHA and were not approved by HUD or a government agency.”