Everyone needs a little help now and then, especially when facing the major expense of buying a home.  Through the US Department of Housing and Urban Development, qualified lenders issue loans such as the MA Federal Housing Administration (FHA) Loan.  It’s known as a ‘government loan,’ but the FHA does not actually loan out the money to homebuyers; rather, it insures mortgages that originate with private lending institutions.  When a borrower is limited on the amount of down payment on hand for a home loan or cannot afford all of the costs connected to home buying, a MA FHA Loan may provide the help needed for a low-income family seeking to own their own home.  The lender is assured of payment of the loan because of the FHA insurance invested in the mortgage.  For this insurance the borrower pays a one half of 1% fee on the balances of the mortgage and receives the benefit of lower interest rates on the loan.

Historically, one function of MA FHA Loans has always been to provide insurance to lenders, but the FHA now assumes other roles to protect both lender and buyer.  MA FHA Loans can also be used to remodel, make repairs on or upgrade to more energy-efficient standards on existing homes, or even to re-finance.  Buyers must qualify as low or moderate income to be eligible for the low interest, fixed or adjustable rates for either home buying or home improvements.  Instead of the standard 20% down payment, a mere 3% down payment is required to obtain a MA FHA Loan.  Legislation is pending to raise limits on the amounts that can be borrowed, making it possible for families to purchase homes that would not be able to otherwise.

Some things must be considered when contemplating a MA FHA Loan.  A less than perfect credit rating does not necessarily prevent qualifying for the loan.  However, bankruptcy and foreclosure history will stall the process.  A borrower must wait 2 and 3 years, respectively, past these occurrences and then another 2 and 3 years, respectively to regain good credit before qualifying for an MA FHA loan.

At Interactive Financial, our dedicated, knowledgable loan officers are availabe 24 hours a day 7 days a week to assist you in finding the best financing option for you. Visit us online at www.myficonline.com to see how we can assist.