What are FHA Loans?
The Federal Housing Administration (FHA) insures some mortgage loans so that more lenders are willing to make loans to borrowers who might not be able to qualify for other loan types. This is true for borrowers with sketchy credit histories or because of high debt-to income ratios. With a FHA insured loan, a homebuyer can make a down payment of as little as 3 percent. The FHA charges the borrower an upfront mortgage insurance premium fee, plus a monthly charge on all loans.
FHA loans are those that fit under the guidelines established by the Federal Housing Administration, which is a government agency under the direction of the Department of Housing and Urban Development [HUD]. FHA loans are often more lenient than those set by Freddie Mac or Fannie Mae, and the FHA requires a seller to pay for many of the fees associated with selling a property, often making them more attractive to borrowers who qualify.
The Federal Housing Administration (FHA) insures some mortgage loans so that more lenders are willing to make loans to borrowers who might not be able to qualify for other loan types. This is true for borrowers with sketchy credit histories or because of high debt-to income ratios. With a FHA insured loan, a homebuyer can make a down payment of as little as 3 percent. The FHA charges the borrower an upfront mortgage insurance premium fee, plus a monthly charge on all loans.
FHA loans are loans that fit under the guidelines set by the Federal Housing Administration, which is a government agency under the direction of the Department of Housing and Urban Development (HUD). Some individuals may qualify under the guidelines set by FHA that would not qualify under the guidelines set by Fannie Mae and Freddie Mac.
A. The Federal Housing Administration (FHA) loans are administered by HUD to make homeownership a possibility for more Americans. With the FHA, you don’t need perfect credit or a high-paying job to qualify for a loan. The FHA also makes loans more accessible by allowing for smaller down payments than conventional loans. Anyone who meets the credit requirements, can afford mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan.
