FHA Mortgage Loans: Basic Features
and Loan Limits
by Lisa Phillips
updated July 2010
and Loan Limits
by Lisa Phillips
updated July 2010
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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.
Find and FHA Lender
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.
Find and FHA Lender
|
Any area where the loan limits may exceed the floor is known as a high cost area (the
"ceiling") and the loan limits are as follows:
"ceiling") and the loan 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 above the "national ceiling
of $729,500." The limits are as follows:
Virgin Islands. The mortgage loan limits can be adjusted up above the "national ceiling
of $729,500." The limits are as follows:
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Since its inception in 1934, FHA has
insured over 34 million properties by
providing mortgage insurance on
single-family, multifamily,
manufactured homes and hospital
loans made by FHA-approved
lenders.
The mortgage insurance provided by
FHA will pay the lender if a default
occurs by the homeowner. Borrowers
must qualify and meet lender
requirements but the lender bears
less risk because the FHA insures
the mortgage loan. There are many
benefits and protections that come
with FHA loans. Some of those
benefits are listed below:
insured over 34 million properties by
providing mortgage insurance on
single-family, multifamily,
manufactured homes and hospital
loans made by FHA-approved
lenders.
The mortgage insurance provided by
FHA will pay the lender if a default
occurs by the homeowner. Borrowers
must qualify and meet lender
requirements but the lender bears
less risk because the FHA insures
the mortgage loan. There are many
benefits and protections that come
with FHA loans. Some of those
benefits are listed below:
The Federal Housing Administration (FHA) is part of the United States
Department of Housing and Urban Development (HUD) and is the
largest government insurer of mortgages in the world.
Department of Housing and Urban Development (HUD) and is the
largest government insurer of mortgages in the world.
Basic Features and Benefits of FHA Loans:
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
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
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Related Topics:
- Nationwide Downpayment Assistance Programs
- The Benefits of Fixed Rate Mortgages
- VA Homes Loans
- Hard Money Mortgage Loans
- Adjustable Rate Mortgage Loans
- Negative Amortization Mortgage Loans
- Interest only Mortgage Loans
- Balloon Payment Mortgage Loans
- Benefits of making Bi-Weekly Mortgage Payments
- Options to Foreclosure
- Stop Foreclosure with Forbearance
- How to Request a Mortgage Loan Modification
- Downpayment Assistance Listed by State
credit history with reasonable credit underwriting and does not solely rely upon credit scoring.
Low Down Payment. FHA requires a 3.5% downpayment which can be funded by a gift from a
family member, employer, charitable organization or grant. Available on 1-4 unit properties.
Competitive Interest Rates. Because FHA loans are insured by the government, lenders can
offer some of the best interest rates.
Easy Qualifying. The requirements for loan qualification are often easier than conventional
mortgage loan qualification because lenders have the assurance that mortgages are backed by the
government.
Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a
discount of 50% from the list price of a 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:
Manufactured and Mobile Homes. FHA has two different loans for manufactured and mobile
homes, one for borrowers who own the land and the other for mobile homes located in mobile home
parks. Get more information from HUD.
Funds for Fixer-Uppers, Repair and Remodeling. HUD's 203(k) program can help you
purchase or refinance a property and include in the loan the cost of repairs and home
improvement. You can also refinance your existing home with FHA and include the costs of
remodeling in the new loan. Visit HUD's 203(k) program for more details.
Reverse Mortgage Plans for Seniors. FHA's reverse mortgage program allows seniors to
convert their built up equity to cash and repayment is only required when the senior no longer uses
the home as their principal residence. See HUD's reverse mortgage.
Other Uses of FHA Loans. FHA loans can be used to make your home more energy efficient.
FHA's Energy Efficient Mortgage program is for homebuyers as well as existing homeowners.
Learn more.
Help to avoid Foreclosure. FHA insured loans have many options to help you avoid foreclosure
and keep you in your home. One program is partial claim. Under the partial claim program your
lender can obtain a one-time payment from FHA-Insurance fund to bring your mortgage current.
FHA will advance the defaulted amount on behalf of the borrower to the lender. Read more
2010 Guidelines
FHA mortgage loan limits vary by State and Counties, with larger loan amounts allowed in areas
with higher housing costs. To better understand how the limits are set, see MORTGAGEE LETTER
2009-50 from HUD dated November 25, 2009.
Minimum FHA loan limit amounts (the “floor”) by property size for 2010 are as follows:
Low Down Payment. FHA requires a 3.5% downpayment which can be funded by a gift from a
family member, employer, charitable organization or grant. Available on 1-4 unit properties.
Competitive Interest Rates. Because FHA loans are insured by the government, lenders can
offer some of the best interest rates.
Easy Qualifying. The requirements for loan qualification are often easier than conventional
mortgage loan qualification because lenders have the assurance that mortgages are backed by the
government.
Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a
discount of 50% from the list price of a 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 officer
- Pre-K through 12th grade teacher
- Firefighter
- Emergency medical technician
Manufactured and Mobile Homes. FHA has two different loans for manufactured and mobile
homes, one for borrowers who own the land and the other for mobile homes located in mobile home
parks. Get more information from HUD.
Funds for Fixer-Uppers, Repair and Remodeling. HUD's 203(k) program can help you
purchase or refinance a property and include in the loan the cost of repairs and home
improvement. You can also refinance your existing home with FHA and include the costs of
remodeling in the new loan. Visit HUD's 203(k) program for more details.
Reverse Mortgage Plans for Seniors. FHA's reverse mortgage program allows seniors to
convert their built up equity to cash and repayment is only required when the senior no longer uses
the home as their principal residence. See HUD's reverse mortgage.
Other Uses of FHA Loans. FHA loans can be used to make your home more energy efficient.
FHA's Energy Efficient Mortgage program is for homebuyers as well as existing homeowners.
Learn more.
Help to avoid Foreclosure. FHA insured loans have many options to help you avoid foreclosure
and keep you in your home. One program is partial claim. Under the partial claim program your
lender can obtain a one-time payment from FHA-Insurance fund to bring your mortgage current.
FHA will advance the defaulted amount on behalf of the borrower to the lender. Read more
2010 Guidelines
FHA mortgage loan limits vary by State and Counties, with larger loan amounts allowed in areas
with higher housing costs. To better understand how the limits are set, see MORTGAGEE LETTER
2009-50 from HUD dated November 25, 2009.
Minimum FHA loan limit amounts (the “floor”) by property size for 2010 are as follows: