FHA Loans or FHA Insured Loans are actually a type of federal housing assistance as they traditionally have allowed low to middle income families to borrow money for the purchase of a home, when they otherwise would not have qualified for a home loan.
The FHA created the program in 1934 to counteract the rapid rise of foreclosures and by giving lenders some insurance. The main difference to conventional loans is that FHA loans are government backed, allowing lenders to be protected in case of loan defaults and also enabling them to offer better interest rates to low income borrowers.
KDA Home Financial can help you in figuring out if you qualify for a FHA loan. With a FHA Loan the minimum down payment is generally 3.5% of the loan amount if your credits score is at least 580.
The max amount of the loan amount varies by counties.
There are several types of FHA loans which are mainly conceptualized for first time buyers or reverse mortgages for Senior Citizens. We recommend looking into FHA Loans if you have not so perfect credit and little cash to put down on a home. An important aspect of FHA Mortgage Loans is that they require a mortgage insurance which is to be paid upfront and annually. While this can be a substantial amount, it is generally rolled in with the total loan and paid off through the life of the mortgage loan.
On a positive note: FHA loans do not have a prepayment penalty and they are assumable, meaning you can pass the FHA mortgage on to someone else.
Let KDA Home Financial assist you with your FHA or conventional home mortgage. Contact us today to learn more at 480-939-3009.