FHA Loans

The Federal Housing Authority (FHA) was formed as part of the National Housing Act of 1934 to curb the devastating affects the Great Depression was having on the American housing market. Having gone through many additions and changes over the decades, an FHA loan now stands as the second most common loan behind standard conforming mortgages due to its combination of low down payment and attractive interest rates.

The FHA doesn't actually loan money. Rather, it's a Federally-sponsored insurance program that guarantees loans for lenders in case of default. This Federal guarantee lessens the risks to lenders thereby allowing them to require small down payments and low interest rates.

Highlights of an FHA loan:

• Minimum down payment — 3.5%
• Fixed rate — 30, 20 and 10 year terms
• Adjustable rate mortgages — 3, 5 and 7 year terms
• Streamline refinances — no appraisal, no income verification needed
• Gift funds can be used for down payment

If you would like to learn more about how an FHA loan can get you into the home of your dreams or could help lower your current mortgage payment, please contact me anytime.