What’s an FHA loan?
If you found yourself asking, What’s an FHA loan? ? or are deciding what fha loan is right for you. Your not the first so don’t worry! educating yourself, prior to the process of purchasing a home is the best step you can take now. After all, this is about making the best choices for the future. At Vylla we can assist you during every step of the process.
The Federal Housing Administration (FHA) is part of the United States Department of Housing and Urban Development (HUD) and provides various loan programs that make getting a home loan easier for those with limited credit experience, a small down payment, limited funds to make monthly payments and/or for those who may not qualify for other types of loans. The FHA allows applicants to qualify for mortgages by providing lenders with protection against losses resulting from homeowners defaulting on their mortgage loans. The lenders, therefore, have less risk when approving FHA loans , as long as the loans meet mandatory requirements established by FHA.
Congress created the FHA in 1934 to address challenges millions of Americans were facing in the housing industry. Since then, the FHA has stimulated the economy through home and localized development programs, trickling growth and opportunity down to local communities in the form of jobs, building suppliers, tax bases, schools and other forms of revenue.
FHA mortgage loans typically offer more flexible underwriting guidelines than conventional loans.Now that we have addressed some details as to What’s an FHA loan? Here are some features of FHA loans:
- Lower credit scores acceptable
- Up to 30-year fixed rate term
- Down payment as low as 3.5%
- Refinance with limited equity
- 100% of the funds of a gift from a family member may be used for down payment and closing costs
- No pre-payment penalties
- Refinancing option for current high cost mortgages
- Non-occupant co-borrowers acceptable
FHA currently has 4.8 million insured loans for single family mortgages and 13,000 insured multifamily projects in its portfolio and can be an attractive loan option if you meet their criteria. If you are interested, be sure to educate yourself on the options and contact a professional to learn more.
Speak to one of our local Realtors at Vylla to point you in the right direction.