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Are you looking to buy your first home and wondering where to start?
If you have done any research on first-time home buying you have probably heard about FHA home loans. However, there is a good chance no one took the time to explain what exactly a FHA loan is and how it can help you buy your first home.
First-time Home Buyer
The Federal Housing Administration (FHA) is a division of the US Department of Housing and Urban Development and their primary mission is to help more Americans to become homeowners. They don’t actually lend you money for a home or give you a mortgage, but they use the full faith and credit of the US government to insure your home loan.
This government mortgage assistance makes it much easier for you to buy your first home.
An FHA loan can help you secure a lower down payment, reduce closing costs, and make it easier to qualify with less than perfect credit.
FHA Mortgage Loan Eligibility
To provide this government mortgage assistance to first-time home buyers FHA provides 203b mortgage insurance under the following qualifying conditions:
- The mortgage company, bank, savings and loan association must be an approved FHA lender
- The home purchase or refinance must be for a principal residence
- The borrower must meet standard FHA credit qualifications
- The borrower must be eligible for approximately 96.5% financing
- The property must be a 1-to-4 unit structure
- The mortgage must be within the FHA mortgage loan limits for your local real estate market
Other FHA Loan Programs
203k Rehabilitation Program - Are you a handyman and looking to get a bargain on a fixer-upper home? Then the FHA 203k Rehabilitation Loan might be a great mortgage option for you. This unique home financing program allows for you to purchase or refinance a home and include the cost of making needed repairs and improvements to the property.
Learn more about 203k Rehabilitation Program requirements:
Reverse Mortgage or Home Equity Conversion Mortgage (HECM) – This government mortgage assistance is intended to help seniors withdraw some of the equity from their homes to give them greater financial security. Many elderly Americans own their homes and have been financially responsible and hard working their entire lives, but are finding their fixed income insufficient. A reverse mortgage or HECM can help these seniors supplement social security, pay for unexpected medical expenses, or make necessary home improvements.
Learn more about Reverse Mortgages and HECM requirements:
Energy Efficient Mortgage (EEM) - Everyone is trying to Go Green and the government is no exception. The US government wants you to Think Green and they are willing to provide FHA mortgage assistance to make your home more energy efficient.
Learn more about Energy Efficient Mortgage requirements:
- Energy Efficient Mortgage [HUD.gov]
Manufactured (Mobile) Home Programs - HUD is not only concerned about the affordability of housing, but also wants to ensure the health and safety of their homeowners. Manufactured housing is one of their key areas of concern for protecting homeowners–specifically enforcing the federal manufactured home construction and safety standards and administering dispute resolution.
Learn more about Manufactured and Mobile Home programs:
- Office of Manufactured Housing Programs [HUD.gov]
More Resources for FHA Loans:
- Why Ask for an FHA Loan? [HUD.gov]
- Let FHA Loans Help You [HUD.gov]
- Buying a Home [HUD.gov]
Do you want more information on FHA loans from an FHA-licensed mortgage broker?
Use the LendingTree mortgage process (select your loan type, home type, and property state) below this article. Very quickly you will have up to 4 expert mortgage lenders competing to give you the best answers and service for your mortgage needs.
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