Large down payments and high interest rates often discourage prospective homeowners. However, an FHA loan gives new homeowners who would not usually be able to qualify for a home loan the option of a low interest home loan that is insured by the federal government and requires minimal down payment. Apply online to contact an FHA loan expert today.
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Unlike some other federally funded programs, FHA loans do not have a limit to the amount of income a borrower can make. However, the monthly payments for the loan including interest, insurance and principal, should not be above 29% of the monthly income.
The maximum amount of an FHA loan varies from county to county, but as of January 1, 2004 the Department of Housing and Urban Development announced loan increases up to $160,176 in low cost areas and to $290, 319 in high cost areas.
The term “FHA loan” is deceptive. An FHA loan is not actually a loan given by the government, but is insured by the government through the Department of Housing and Urban Development (HUD). Through an FHA insured loan, low income families and first time buyers are able to take advantage of a required down payment of only three-percent.