How to Get an FHA Mortgage Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Mortgage |
| Lender: | Government |
| Secured: | Yes |
An FHA mortgage loan is available through the Federal Housing Administration, which is part of the United States Department of Housing and Urban Development. The FHA insures the loan so that the lender can offer a borrower a better deal. FHA mortgage loans offer borrowers low down payments, low closing costs, and easy credit qualification. These loans can help people buy their first homes or buy a home that needs renovating, including funding to purchase and repair, fix up, or renovate a home. Or, such a mortgage can help people who already own a residence refinance the mortgage and add the cost of repairs. An FHA mortgage loan also offers help for seniors who want to convert a portion of their equity into cash balances.
An FHA mortgage loan also has environmental benefits. Homeowners can include the costs of energy improvements into an FHA energy efficient mortgage. Also, FHA mortgage loans can provide financing for manufactured housing and mobile homes. There are two loan products — one for people who own the land that the home is on and another for mobile homes that are or will be located in mobile home parks.
Who it's for
An FHA mortgage loan helps all different kinds of people with many different kinds of financing for home-buying and repairs. The down payment on FHA mortgage loans can be as low as three percent of the purchase price and most of the closing costs and fees can be included in the loan. FHA mortgage loans are also available on multifamily properties of up to four units.
What you need to do to apply
In order to obtain an FHA mortgage loan, interested borrowers should contact a lending institution and inquire about this specific type of mortgage. Banks will need confidence of repayment, a credit report, and other personal and financial information, as well as information about what the cash may be used for. A property appraisal may also be required.