What are FHA Home Mortgage Loan programs?
The FHA home mortgage loans are considered “Government” loan programs along with USDA and VA loans because they are directly insured by the Federal government. Conventional loan programs in comparison are insured by private companies such as Fannie Mae, Freddie Mac and other private mortgage insurance companies. Many folks mistakenly believe those two “F” organizations are government agencies as well. They aren’t! They are NYSE traded private companies, not backed by government in any way. An FHA home mortgage is insured and underwritten by the Federal Housing Administration. An FHA home mortgage is commonly sold to first time home buyers who may have some credit issues and little down payment. FHA loans require 3% down and the borrower can finance the closing costs (on refinances…roll them into the loan amount). In addition to all the other closing costs, FHA loans require a 1.5% up front mortgage insurance premium. If you have a 200k loan amount, $3,000 is added to your loan amount f
