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5 Quick Points to Simplify the Federal Housing Administration Loan
One of the most important loan products to understand
A Federal Housing Administration (FHA) loan is a type of mortgage insured by the FHA and is issued by an FHA-approved lender. It can be used on residential properties ranging from single-family homes to four-plexes. FHA loans typically have 15-year or 30-year terms.
The FHA was established in 1934 by Congress through the National Housing Act of 1934. It was during the Great Depression when the housing industry was in extreme trouble. Back then, approximately 40% of households owned their homes. With the FHA being one of the leading programs for homeownership, as of Q2 2020, homeownership in the United States is at approximately 68%.
The FHA loan is known for primarily offering one of the lowest down payments if you meet the requirements at 3.5%. That means you can borrow up to 96.5% of that home you want. With that being said, the five following points need to be further understood to determine if the FHA loan is the right kind of mortgage product for you:
1. FHA Loan Requirements
2. Mortgage Insurance
3. Types of FHA Loans
4. FHA Loan Limits
