How to Get a Basic FHA Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Housing |
| Lender: | Government |
| Secured: | Yes |
A basic FHA loan is a federal assistance mortgage loan that is insured by the United States Federal Housing Administration, or FHA. The loan is issued by federally qualified lenders. Historically, FHA loans have allowed lower income Americans to borrow money for the purchase of a home they could not otherwise afford. The FHA's purpose in this program is to insure loans made by private lenders to home buyers.
The FHA basic loan can be administered with a variety of term and interest options based upon the needs of the borrower. Typically, this program will provide interest rates anywhere from four to seven percent.
Who it's for
The FHA's mortgage insurance programs help low- and moderate-income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages lenders to make loans to otherwise unworthy borrowers and projects that might not be able to meet conventional underwriting requirements, protecting the lender against loan default on mortgages for properties that meet certain minimum requirements — including manufactured homes, single and multifamily properties, and some health-related facilities.
What you need to do to apply
In order to obtain a basic FHA loan, a borrower must contact several lenders or mortgage brokers and determine which ones originate FHA loans. Each lender sets its own rates and terms. Also, you will need to determine your debt to income ratio in order to determine how much you can spend on a home. Then you will need to get pre-approved for the FHA basic home loan so you are ready when it comes time to make an offer on a home.
Apply for a Basic FHA Loan
Apply online for any type of housing loan at LoanWeb: