FHA Insured Home Loans
With an FHA insured mortgage loan, you can make extra mortgage payments toward the principal when you make your regularly monthly mortgage payment. By making extra payments, you can repay the FHA loan faster, and save on interest. You can also pay off the whole balance of your FHA mortgage loan at any time. The (HUD) Department of Housing & Urban Development is the federal agency responsible for national policy, and mortgage programs that address the housing needs of United States. The FHA Federal Housing Administration which is under HUD plays a major role in helping homeownership by evaluation homeownership for lower-and moderate-income homeowners. FHA helps first time home FHA buyers, and others who might not be able to meet down payment guidelines for conventional/conforming mortgage loans by providing mortgage insurance (MIP) to private mortgage lenders.
Everyone, who has a good credit file, enough assets to close the mortgage loan, and sufficient steady income to make monthly mortgage payments can be approved for an FHA insured mortgage loan. To get a FHA-insured mortgage loan, you need to apply to a HUD-approved lender. FHA loan insured mortgages are available for single family residences, for 2 unit, 3 unit, and 4 unit properties, and for condos. Interest rates on FHA mortgage loans are generally market rates, while the down payment is lower than the conventional mortgage loans. Down payments can be as low as 3 percent, and the closing costs can be paid by the seller. NC Mortgage rates for FHA are generally very competitive with regular conventional mortgage rates.
Section 203b FHA mortgage program is the most frequently used. You may use this FHA loan program to purchase a new or existing one-to-four family residences, including manufactured homes, in both rural and urban areas. A section 203b FHA fixed mortgage loan may be repaid in monthly mortgage payments over 10, 15, 20, 25, or 30 years.
FHA Loan Limits – varies by county. Most counties are approximately 200k, and most metropolitan areas are approximately 362k. You can search for the specific amounts located at HUD’s website. FHA Loan Limits
Section 234c FHA Loans provides mortgage insurance for home buyers who wish to buy a unit in a condo project. The condo may consist of more than one building, such as a group of row apartments, high-rise buildings, town homes, or any combination of these structures. Any condo project must be approved by HUD.
In some cases, HUD insures mortgage loans (section 237 mortgage loans) for people who have had credit issues, and do not meet standard credit parameters to purchase low cost homes.
FHA also insures mortgage loans for home improvements – FHA 203k mortgage loans. Section 203k FHA mortgage loans allow you to purchase or refinance, and rehabilitate a home of at least 1 year old. A portion of the mortgage loan proceeds are used to payoff the existing mortgage, and the remaining funds are placed in an escrow account, and released as rehabilitation is finished. The improvements financed with FHA 203k mortgage loan proceeds must comply with HUD’s ‘Minimum Property Standards’, and all local codes and ordinances.
FHA Non Traditional Tradelines – sometimes a borrower may not have a credit score or may not have any credit. FHA Non Traditional Tradelines are used in place of an empty credit report. Car insurance, rental history, phone bills, water bills, electric bills, and car payments are commonly used as some of the FHA required tradelines on borrowers with no credit scores.
