What is an FHA Loan?(under construction)

FHA loans are intended for lower to middle income families as well as those that are purchasing their first home. Over the years FHA has helped many Americans become homeowners who would not otherwise have qualified for home loans by private lenders. According to HUD, "250,000 families will be eligible to buy or refinance a home using FHA-insured mortgages, thanks to President Bush’s economic growth package. HUD's Federal Housing Administration (FHA) is now temporarily increasing its loan limits, which means it can insure larger mortgages at a more affordable prices in high-cost areas of the country."

FHA does not make loans or guarantee loans. It insures loans. The insurance removes or minimizes the default risk lenders face when buyers put down less than 20 percent. Without further approval from FHA, its approved lenders are authorized to:

• Take loan applications
• Process loan applications
• Underwrite and close the loan

First time home buyers constitute a large share of the lending market. However, many do not have established credit histories or a substantial amount of money to put down for a downpayment. As of now, FHA loans require a 3% downpayment to obtain financing and have different loan limits in different states. FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans. For first time home buyers the time has never been better to finance your home through the FHA loan program. In light of the downturn in the subprime loan market, many first time buyers are now looking for other options. FHA loans can be the answer.