The Basics of FHA Mortgage Loans
Since 1930’s, an organization called FHA has been helping families to purchase homes and become proud homeowners by offering FHA mortgage loans. These loans have been extremely popular over the decades that they have been on offer. However, many people and prospective homeowners have a very little idea about the FHA government home loan.
Herein, we have tried to offer some basic information regarding FHA Home Mortgage.
A Little about FHA
FHA is an agency of the Federal Government whose purpose is to insure the private loans that are issued by mortgage companies and banks for the purchase of a new house or an existing house and for conducting home repairs.
It is a part of the Department of Housing and Urban Development Office of Housing, since 1965 and today its role is to act as a buffer between the lenders and the borrowers. They reduce the lenders risk, and help borrowers get a FHA mortgage loan.
Whom Does the FHA Government Home Loan Seek to Help?
Quite a few people are under the misconception that FHA mortgage loans are offered to the first time buyers only. This is not so as they are offered to anybody and everybody who is looking to purchase a home or refinance a home.
One of the most popular FHA home mortgages amongst the host of loan programs offered by the FHA is the 203(b) FHA government home loan, wherein, the borrowers only have to pay 3% of the value of the home as down payment. More importantly at the time of the closing of the loan, you are allowed to take 100% of the money as a gift from various sources like relatives, a government agency or even a non-profit organization.
FHA has enabled many a minority borrower or borrowers with troubled credit history to purchase their own home or refinance their homes, by offering them an FHA mortgage loan.
FHA Home Mortgage Funding Process
FHA has a self-generated income, which is a result of the FHA mortgage loan insurance that has to be paid by the homeowners. The amount is captured in an account that is then used to finance the activities of the FHA. Thus, it can insure the lenders against the possibility of a default from the borrowers end.
Overall, the whole process of offering the FHA government home loan has resulted in the stimulation of the US economy because of home and community development. It has been seen that there has been a trickledown effect on local communities, as there has been an emergence of employment opportunities across various fields.
A FHA mortgage loan helps all kinds of people. So go for it and experience the difference!Apply Online