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What is meant when someone says an FHA loan is guaranteed”?

April 26, 2017FHA loan meant

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What is meant when someone says an FHA loan is guaranteed”?

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The Federal Housing Administration does not grant the loan. Rather, they guarantee to the lender that a portion of the loan will be repaid in the event the borrower defaults by insuring the loan. The guarantee is not meant to imply that applicants are guaranteed to be approved for the loan; applicants must still qualify for the loan based on acceptable property, income and credit history.