What is the FHA? It stands for Federal Housing Administration?
The Federal Housing Administration, generally known as “FHA”, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.
A little bit about of History of the FHA.
Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development’s (HUD) Office of Housing in 1965. When the FHA was created, the housing industry was flat on its back:
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Two million construction workers had lost their jobs.
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Lending terms were difficult to meet for homebuyers seeking mortgages.
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Mortgage loan terms were limited to 50 percent of the property’s market value, with a repayment schedule spread over three to five years and ending with a balloon payment.
Back in 1934, America was primarily a nation of renters. Only four in 10 households owned homes. America was trying to get out of the Great Depression. The FHA program help homeowners keep their homes and afford their homes.
How does that affect you today?
Here in Fort Lauderdale and the rest of South Florida this is the most prevalent home loan available. Whether you are purchasing, refinancing, taking cash out for home improvements or taking cash out to consolidate debt, you will most likely get an FHA loan. Conventional financing is not an option unless you put down 5% or have 5% equity stake in your home. Even then conventional financing may not be the way to go. The professionals here at www.fortlauderdaleloanfha.com
How FHA Loans Work?
FHA does not make loans or guarantee loans. It insures loans. The insurance removes or minimizes the default risk lenders face when buyers put down less than 20 percent. Without further approval from FHA, its approved banks and lenders are authorized to:
- Take loan applications
- Process loan applications
- Underwrite
- Close Loans
FHA mortgages also have the best rate and features in a mortgage. Although they have the best rates, it may not be for you. To find out if you qualify for a home loan or if you have questions for FHA vs. Conventional financing please email us at info@fortlauderdaleloanfha.com or call 866-228-5768. Also you can have someone contact you by filling out the form below.
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