FHA Home Loans

In 1934 the Federal Housing Administration created the National Housing Act as a way to help American families afford to take out home loans even if they did not have high credit. This Act was created during the Great Depression when foreclosures were at an all time high, and people were struggling to make ends meet. The FHA did this by insuring borrowers who had low or no-credit and would otherwise not be approved for a loan.

FHA Loans Today

Today, the FHA still insures borrowers who have little or no credit so that they can obtain loans and also not pay huge sums each month for Private Mortgage Insurance (PMI). The FHA does not issue any money itself, but rather it helps make you a secure borrower to private lenders by insuring you for a certain amount in the event of a default on the loan resulting in foreclosure.

Benefits

If all the FHA does is insure the loan for you, you might be wondering why you would choose an FHA Loan over a conventional loan. For starters, because you are insured by the Federal Government, you are a much more secure and attractive borrower to private lenders. In return, the private lender is often willing to issue you a loan with a very small down payment and low, competitive interest rates. You can also qualify to have the loan pay for up to 6% towards closing costs of obtaining the loan. Additionally, because the FHA wants to make sure you don’t default on your loan, they are often willing to step in and help you out if you have problems making payments in the future.

Who Qualifies

People who can qualify for FHA Loans include those with little or no credit and low to middle-income families. The FHA will still want to look at your credit score, financial situation and debt-to-income ratio to make sure you are not a huge risk or liability. Your private lender will be able to assist you in applying for the FHA benefits.

Get Pre-qualified Today!

It’s easier than ever to get pre-approved for an FHA Loan. Simply take a minute to fill out our secure online form. It only takes a minute, is completely free and has no obligations. Let us help you start on the road to homeownership today!

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