What Are the Different Types of FHA Loans Available?
• FHA fixed-rate mortgages, or Section 203(b) loans, are the most common and popular type of FHA mortgage. The interest rate does not change with a fixed-rate mortgage. A fixed-rate FHA mortgage insures the lender for the total amount of the mortgage in case the buyer defaults. Fixed-rate mortgages can be taken out for periods of 10, 15, 20, or 30 years. • The FHA Renovation Mortgage, or 203(k), allows homeowners to borrow money for the purpose of renovating their home. Up to 110% of the cost needed to repair and renovate a home can be financed under this program. There are, however, restrictions regarding the types of renovations that will be allowed, and the minimum amount of the 203(k) is $5000. • FHA adjustable-rate mortgages, or Section 215, have interest rates that vary contingent on the current federal index. An adjustable-rate mortgage, or ARM, may be attractive under certain economic conditions as the interest rates are initially lower than interest rates on a fixed-rate mortg
