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.
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Another type of FHA insured loan is a reverse mortgage which allows a homeowner of 62 years or older to receive an advance, either lump sum, monthly or through a credit line, that is based on the amount of equity in his or her home. That no monthly payments are required make this type of loan very popular. The FHA loan has made qualifying for a home loan easier than ever. Fill out our short form to contact up to four FHA loan lenders today.
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.
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.