Why do we care in Roseville or Sacramento about FHA mortgages?
The FHA (Federal Housing Administration) began in 1934 in an effort to encourage home ownership despite the difficult economic times of the era. This program enables consumers who may not qualify for a standard loan to obtain the financing they need to purchase a home without income limitations.
FHA is a department of HUD (Housing and Urban Development) which insures all of their loans. As a matter of fact the way I like to put it is “FHA is insurance”. This insurance reduces the lender’s risk on the mortgages they originate giving them greater flexibility to approve more loans. FHA loans are not credit-score driven, a home buyer may be able to obtain a loan despite having had credit problems or even a bankruptcy in the past. Likewise, for a homebuyer without a traditional credit history, it is still possible to obtain financing by documenting payment histories on items such as rent and utilities. This is not the same for most other types of mortgage financing.
FHA cans also provide more flexibility when it comes to closing costs and the down payment. Many of the closing costs can be incorporated into the loan, and a down payment of less than 3.5% of the purchase price is required. Much less than conventional and other types of loans. The down payment may be obtained as a gift from a family member or through a down-payment assistance program, something else that can not happen with other types of loans more often than not. Although they are different, FHA loans are processed just like any other loan, and provide a wonderful opportunity for consumers who are seeking to achieve home ownership!
The FHA mortgage is playing a BIG part in helping Roseville and Sacramento area families become homeowners. Some for the first time, others have owned a home before, but all of them likely could not have qualified for any other type of loan.
~Greg :: The Roseville Loan Expert