FHA Loans
What is an FHA Loan?
Many people think that they have to get an FHA Loan through the Federal Housing Administration. However, the Federal Housing Administration does not provide FHA loans; they simply guarantee or insure the loans. FHA loans are often referred to as government-insured loans or government loans. To get an FHA loan, you apply through an approved lender like Countrywide.
FHA loans have features that can make them easier for first-time home buyers to qualify such as lower down payments and flexible lending guidelines.
More specific features include;
- Low down payment (usually 3% of the FHA appraisal value or the purchase price, whichever is lower)
- No maximum income/earning limitations
- Fixed rate and ARM loans available
- Insurance from the federal government replaces private mortgage insurance
- Maximum loan amounts vary by county - ask for information on your county
Who can qualify for an FHA Loan?
An FHA Loan could be the ideal solution for some homebuyers, especially if one or more of the following apply:
- First-time homebuyer
- Not a lot of money to put down on a house
- Low monthly payments are important
- Non traditional employment or credit history
There are also eligibility requirements for the property. Other restrictions apply. Properties that are eligible for an FHA loan include single-family homes, 2-4 unit properties, condominiums, and manufactured homes.
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