FHA Loans

The FHA mortgage insurance program is designed to help low and moderate-income families purchase a home by lowering some of the costs of their mortgage loan. It also encourages lenders to loan money to creditworthy borrowers that might not be able to meet some of the conventional requirements by protecting the lenders against any defaults that occur on properties that meet certain criteria. FHA loans are restricted to the primary residence of the borrower. Some of the benefits of a FHA loan include:

• Lower down-payments. A FHA loan down-payment can be as low as 3% while other conventional loans may require a down-payment of 10% or higher.
• On many conventional loans, the borrower must pay the closing costs of the loan at the time of purchase. An FHA loan will allow most of the costs to be financed with the loan, reducing the up-front cost of buying a house.
• The FHA also imposes limits on some of the fees that a lender may charge for a loan.