An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance in case the borrower defaults on his or her loan obligations.
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Available to all buyers, FHA loan programs are designed to help creditworthy, low to moderate income families who do not meet requirements for conventional loans. An FHA loan allows borrowers to finance homes with down payments as low as 3.5%.
The FHA is the largest insurer of residential mortgages in the world, insuring tens of millions of properties since 1934 when it was created. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment. Even borrowers who have suffered from bankruptcy or foreclosures may qualify for an FHA-backed mortgage.
Applying for an FHA loan is similar to any loan application process. Follow these steps to apply for an FHA loan:
At Mortgage 1, we specialize in FHA loans. To see how we can help you, email us or call (866) 532-0550.