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What is a FHA Mortgage?

April 26, 2017borrow federal housing administration FHA home loan Lender loan mortgage mortgages Real Estate

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What is a FHA Mortgage?

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An FHA mortgage is a home loan which is insured by the Federal Housing Administration (FHA), an agency within the United States Department of Housing and Urban Development (HUD). The goal of the FHA program is to make home ownership more accessible to more Americans by making it easier for people who may not be ideal mortgage candidates to obtain mortgages. FHA loans are often very favorable for the borrowers, and from the point of view of the lender, an FHA mortgage is highly secure, making lenders more confident about extending loans to buyers who would otherwise be rejected. The FHA does not actually issue mortgages or loan funds. Instead, it insures mortgages which are financed by qualified lenders. If someone wants an FHA mortgage, he or she must first find a lender who can issue FHA loans, and then apply for a loan and the FHA insurance. When a mortgage is backed by the FHA, it means that if the home buyer defaults, the FHA will cover the funds, so the lender does not take a loss

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A FHA mortgage is a form of insurance. The FHA does not lend money; private lending organizations, such as banks, credit unions, or savings and loans, lend money. A FHA-approved mortgage is insured to the lender in case the homebuyer defaults on the loan.

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A FHA mortgage is when the government guarantees Federal Housing Authority loans. You can put down a smaller down payment on a FHA loan, but you will also be required to pay mortgage insurance.

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FHA loans are insured by Federal Housing Administration and are offered through a mortgage provider. FHA loans are both fixed and adjustable, offer a number of advantages including a a low down payment option. Applicants also can qualify for higher loan amounts as compared to conventional mortgages and allow borrowers to finance their mortgage insurance premium. Loan limits vary dependent upon state and county locations within the country. Designed for 1-4 unit properties, which must be owner occupied.