MIAMI, FL -- The Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban development (HUD), provides mortgage insurance on loans made by approved lenders throughout the United States and its territories. FHA is the largest mortgage association in the world, insuring almost 33 million properties since its inception in 1934.
FHA mortgages can help you buy a home initially and also offer you continual protection every step of the way. Unlike conventional mortgages, FHA-insured loans require relatively little upfront costs. Downpayments are typically 3% of the sale price and the money can come from a family member, employer or charitable organizations. There is more flexibility in calculating household income and it's easier to qualify, even if you've had credit problems. FHA debt-to-income ratio allows you to use 31% of your income toward housing costs and 43% toward housing expenses and other long-term debt.
FHA mortgages also provide lenders with protection against losses as a result of homeowner default on mortgage loans. Since the lenders bear less risk they are more willing to give loans with lower requirements, making it easier for you to qualify.
There are also other important advantages to FHA-insured loans. For example, they allow non-occupying co-borrowers in the event you lack the credit to qualify. FHA loans are also assumable and there are no prepayment penalties if you sell or refinance your home.
If the house you want to buy needs repair, FHA's 203(k) program allows you to finance up to an additional $35,000 to improve or upgrade before you move in. And, if you need help or advice on homebuying, HUD/FHA sponsors housing counseling agencies that offer their services to citizens without cost. You can find a counselor that serves your neighborhood by calling 1-800-564-4287.
Once you are in your home, if you lose your job or become ill and fall behind in payments, FHA is still there to help you. If you should experience hard times after you buy your home, FHA has many options to avoid foreclosure and keep you in your home.
FHA loans are even available to refinance existing mortgages. FHA will offer the same flexible underwriting requirements and the same low interest rates on refinances, even if your current mortgage is not FHA-insured. Plus, you can finance most of your closing costs into your new FHA loan, including any prepayment penalties on your current mortgage.
For more information on the FHA-insured loan program, dial 1-800-CALL-FHA or visit http://www.fha.gov/ .
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Source: Federal Housing Administration
CONTACT: Federal Housing Administration, +1-800-CALL-FHA
Web site: http://www.fha.gov/
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