FHA Financing Basics
Who is Federal Housing Administration?
– The Federal Housing Administration generally known as “FHA” was established in 1934 as adivision of the U.S. Department of Housing and Urban Development. They provide mortgage insurance on loans made by FHA-approved lenders throughout the US and its territories. It is the largest insurer of mortgages in the world insuring over 34 million properties since its inception .
– FHA’s mission is to expand homeownership opportunities, increase minority homeownership, make the home buying process inexpensive and less complicated, and keep existing homeowners from losing their homes – basically to help borrower’s realize the dream of homeownership.
• Eligible FHA Programs
– Section 203(b) – Standard FHA Program: MI for One to Four Family Homes Program
• Section 234(c) – Subsection of 203(b): Condominium Housing Program
• Section 251 – Subsection of 203(b): Adjustable Rate Mortgage Program (ARM)
– Section 203(k) – Rehabilitation Mortgage Insurance Program
• What is FHA Mortgage Insurance?
– FHA MI protects lenders against loss if homeowner defaults on loan. The lender bears less risk because FHA will pay the lender should a homeowner defaults on their loan. The cost of the insurance is passed along to the borrower and is typically included in the monthly payment.
• How is FHA funded?
– FHA operates from self-generated income and costs the taxpayers nothing. The proceeds from the MI paid by the homeowners is used to operate the program entirely. San Diego Ca Mortgage borrowers who can not qualify for a traditional conventional mortgage because they may lack the down payment requirements would benefit from this government loan program.
at is FHA Mortgage Insurance?
– FHA MI protects lenders against loss if homeowner defaults on loan. The lender bears less risk
because FHA will pay the lender should a homeowner defaults on their loan. The cost of the
insurance is passed along to the borrower and is typically included in the monthly payment.
• How is FHA funded?
– FHA operates from self-generated income and costs the taxpayers nothing. The proceeds from
the MI paid by the homeowners is used to operate the program entirely
