| Some people believe that the Federal Housing | | | | foreclosure on another house or property. |
| Authority (FHA) is a lender of money but this is not | | | | The first thing regarding qualifying for an FHA insured |
| really the case. The FHA program actually insures | | | | loan is that the borrower must apply to a HUD |
| loans so that the different lenders do not experience a | | | | approved lender for the loan. Even though the rules for |
| loss if a borrower should not pay their mortgage loan. | | | | an FHA insured loan are less strict than for a |
| The lender's risk is thereby reduced which puts them in | | | | conventional loan, they are certain qualifications such |
| a better position to qualify prospective homebuyers for | | | | as the borrower must be able to afford the loan. |
| loans including offering the borrowers the opportunity | | | | There is a formula to calculate that figure. The housing |
| to make lower down payments and decrease the high | | | | ration is calculated by using the monthly income as a |
| cost of closing a loan. FHAs participation in the | | | | base, after you know that you figure what a |
| business of mortgage loans makes it possible for | | | | borrower's monthly housing costs are. The monthly |
| people who might not be able to become a | | | | housing cost, which also includes the mortgage |
| homeowner to realize their dream of having a real | | | | payment, property taxes, and homeowner's insurance, |
| home for their families. These FHA loans are usually | | | | cannot exceed 29% of this monthly income. The other |
| available in the form of an adjustable-rate mortgage or | | | | part of the equation is the borrower's monthly |
| a fixed-rate mortgage. They are particularly good for | | | | expenses such as car loans, credit cards, etc.). This |
| purchasers of their first house or property. | | | | amount must not go over 41% of the borrower's |
| FHA loans include some of the items listed below. | | | | monthly income. |
| Less strict qualifying requirements. | | | | Of course, there are limits to these FHA loans and |
| Lower down payment, as much as three percent | | | | they are different depending on where you live. Since |
| versus the normal twenty percent. | | | | an FHA loan is mainly geared for lower-income |
| Available for one to four unit properties. | | | | borrowers, this also means that the homes purchased |
| Available for condominiums. | | | | with an FHA loan must be within a certain dollar |
| FHA handles the regulation of the closing costs. | | | | amount. For example, if you compare Boston MA with |
| FHA makes it possible for most of the closing | | | | Wichita KS the numbers are very different. In Boston |
| costs to be part of the actual loan. | | | | MA the FHA will approve a loan for a one family unit |
| Gifts from family or others to go towards the | | | | up to $362,790, while they will only approve up to |
| down payment and also closing costs are allowed. | | | | $200,160 in Wichita KS for the same type of home. |
| Home purchase can be made two years after | | | | These numbers are different for every area in the |
| filing a bankruptcy. | | | | United States. |
| Home purchase can be made three years after a | | | | |