FHALoans
The cornerstone of the FHA’s mortgage insurance program is the Section 203(b) - this program is the successor to the program that spared homeowners from default back in the 1930's. In turn this program helped returning veterans acquire homes in the 1940's and 50's. This also helped to shape the modern mortgage finance system we use in the United States today.
Today, the FHA single to four family mortgage insurance program is still a crucial tool by which the Federal Government enables first time home buyers to purchase a home. Without this program, in many cases, these first time home buyers would not be able to qualify for an affordable mortgage with conventional terms.
Here are some things you should know about the program:
- Lower down payment requirements - conventional mortgages often require a down payment of 5% of more. With a single family mortgage insured by the FHA under section 203(b) down-payments as low as 3.5% are a possibility.
- Limited fees - FHA puts a limit on some fees lenders may charge a home buyer. For example: the origination fee charged by the lender may not be greater than 1% of the total amount of the mortgage.
- HUD puts limits in place that puts a cap on the maximum amount that may be insured.
- Flexible credit requirements.
If you are a first time home buyer then the 203(b) may be the best option for you. There is, of course, a lot of other information you will need to make a truly educated decision as to which loan type is right for you. Our qualified mortgage professionals are standing by to help guide you through this task that may be very confusing if going through it for the first time. Call us today at 800.965.0437 or click here to contact a CHL loan expert right away.
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