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FHA Loans: Basic Features and Loan Limits
by rebuildcreditscores.com
by rebuildcreditscores.com
The Federal Housing Administration
(FHA) provides mortgage insurance on
loans made by FHA-approved lenders.
FHA insures mortgages on single family,
multifamily and manufactured homes. The
mortgage insurance protects lenders
against loss if the homeowner defaults on
the loan.
FHA will pay the lender if a homeowner
defaults. It is the largest insurer of
mortgages and has insured over 34
million properties since its inception in
1934.
(FHA) provides mortgage insurance on
loans made by FHA-approved lenders.
FHA insures mortgages on single family,
multifamily and manufactured homes. The
mortgage insurance protects lenders
against loss if the homeowner defaults on
the loan.
FHA will pay the lender if a homeowner
defaults. It is the largest insurer of
mortgages and has insured over 34
million properties since its inception in
1934.
2009 Guidelines (Beginning January 1, 2009):
FHA mortgage loan limits vary by State and Counties, with larger loan amounts allowed in areas
with higher housing costs. In areas where 115 percent of the median house price is less than 65
percent of the conforming loan limit (the national floor), the limits are as follows:
FHA mortgage loan limits vary by State and Counties, with larger loan amounts allowed in areas
with higher housing costs. In areas where 115 percent of the median house price is less than 65
percent of the conforming loan limit (the national floor), the limits are as follows:
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The information above is not guaranteed as the current economic challenges have created a
need for FHA to regularly adjust and update mortgage loan limits. The most accurate
information can be found at https://entp.hud.gov/idapp/html/hicostlook.cfm for your specific
State and County.
Basic Features of an FHA Mortgage Loan
Low Down-Payment
FHA-insured loans require small down payments.
Flexibility in an FHA Loan
There is more flexibility in an FHA loan than conventional loans in calculating household
income and payment ratios. The cost of the mortgage insurance is typically included in the
monthly payment.
Less than Perfect Credit
FHA loans are generally easier to obtain. These loans have flexible income, debt, and credit
requirements to help borrowers qualify. FHA can help a consumer qualify with less than perfect
credit. Unlike conventional loans, FHA views a consumer’s credit history with reasonable credit
underwriting and doe snot heavily rely upon credit scoring.
Funds may be Gifted
Down payment and closing costs may be funded by a gift, grant or by secured loan. That
means a relative, a government agency, or an approved non-profit organization can gift up to
100% of borrower's down payment and closing costs.
Variety of FHA Loans Available
A variety of fixed-rate and adjustable-rate loan options are available.
Mortgage Insurance
Insurance from the federal government replaces private mortgage insurance.
Types of Mortgage Loans
FHA provides two categories of mortgage loans:
Good Neighbor Next Door Sales Program
HUD offers a substantial incentive in the form of a discount of 50% from the list price of the
home in HUD designated revitalization areas. In return you must commit to live in the property
for 36 months as your sole residence. In order to qualify you must be one of the following:
FHA loans can be used for construction financing, refinancing, modernization, remodeling,
equipment and expansion.
need for FHA to regularly adjust and update mortgage loan limits. The most accurate
information can be found at https://entp.hud.gov/idapp/html/hicostlook.cfm for your specific
State and County.
Basic Features of an FHA Mortgage Loan
Low Down-Payment
FHA-insured loans require small down payments.
Flexibility in an FHA Loan
There is more flexibility in an FHA loan than conventional loans in calculating household
income and payment ratios. The cost of the mortgage insurance is typically included in the
monthly payment.
Less than Perfect Credit
FHA loans are generally easier to obtain. These loans have flexible income, debt, and credit
requirements to help borrowers qualify. FHA can help a consumer qualify with less than perfect
credit. Unlike conventional loans, FHA views a consumer’s credit history with reasonable credit
underwriting and doe snot heavily rely upon credit scoring.
Funds may be Gifted
Down payment and closing costs may be funded by a gift, grant or by secured loan. That
means a relative, a government agency, or an approved non-profit organization can gift up to
100% of borrower's down payment and closing costs.
Variety of FHA Loans Available
A variety of fixed-rate and adjustable-rate loan options are available.
Mortgage Insurance
Insurance from the federal government replaces private mortgage insurance.
Types of Mortgage Loans
FHA provides two categories of mortgage loans:
- • Single Family (1-4 units homes)
• Multi-Family (5 or more units)
Good Neighbor Next Door Sales Program
HUD offers a substantial incentive in the form of a discount of 50% from the list price of the
home in HUD designated revitalization areas. In return you must commit to live in the property
for 36 months as your sole residence. In order to qualify you must be one of the following:
• Law enforcement officers
• Pre-K through 12th grade teacher
• Firefighters
• Emergency medical technician
FHA loans can be used for construction financing, refinancing, modernization, remodeling,
equipment and expansion.
Related Topics
 | First-Time Home Buyer | |
| Rapid Re-Score Credit Files | |
| Foreclosure Help and Options | |
| Down Payment Assistance by State | |
| Types of Mortgage Loans | |
|
In areas where 115 percent of the median house price exceeds the "national floor", the limits
are set at 150 percent of the national conforming limit (the national ceiling). These limits are
as follows:
are set at 150 percent of the national conforming limit (the national ceiling). These limits are
as follows:
There are special exceptions for the high cost areas of Alaska, Hawaii, Guam and the Virgin
Islands. The mortgage loan limits can be adjusted up to 150% of the above ceilings to account
for higher costs of construction. The limits are as follows:
Islands. The mortgage loan limits can be adjusted up to 150% of the above ceilings to account
for higher costs of construction. The limits are as follows:
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