FHA Insured mortgages

The new darling of the homebuyer set, Federal Housing Administration-insured mortgage programs, have been available for decades. and especially for low- to moderate- income families who do not meet requirements for conventional mortgages.

But with the new loan limits as high as $625,500, they've become especially attractive in high cost areas such as Westchester County, NY. FHA loans are expected to account for 25 percent of the mortgages signed in 2009, according to the National Association of Realtors. Because of previously lower loan limits, FHA loans amounted to less than 4 percent of homes sold between 2003 and 2006.

The new FHA model also comes with low down payments and eased credit requirements.

They are much more lenient on how they look at credit scores.

FHA features include:

• As little as 3 percent down.
• Financed closing costs.
• A 1 percent (of the mortgage) ceiling on the amount lenders can charge for closing costs.
• No prepayment penalties.
• Relaxed debt-to-income requirements.
• FHA-approved lenders only.
• FHA-approved appraisals only.

For more information see: http://www.hud.gov/buying/loans.cfm