FHA / VA

    FHA loans have been one of the driving forces of the increased level of home ownership in the United States since 1934. 

    The Federal Housing Administration (FHA) was established to provide and improve home ownership opportunities to the general public through guaranteed private home mortgages and funds to promote housing construction.  The FHA has since merged with the department of Housing and Urban Development (HUD).  In today’s industry, FHA refers to the set of Loan Program guidelines set out in the original act.

    In the United States, HUD administers and provides higher Loan-to-Value (LTV) programs to help advance home ownership opportunities.  Through FHA loan program options, HUD provides insurance to the lender, enabling them to take on high risk loans.  This provides for a guarantee to protect the lender in the event that the borrower is unable to repay the debt and the loan defaults.  HUD does not lend money directly to the borrower.

     FHA loans are different in many ways than other traditional forms of lending.  For example, credit scores are not a major factor in an approval process.  Instead, they are underwritten in a way that provides the borrower the benefit of the doubt that there may have been circumstances beyond their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, they will generally be credit-eligible for an FHA loan.  The FHA guidelines are forgiving about circumstances that many other lending programs, including conventional and sub prime, are not favorable towards.

    These loans are an excellent way for a customer to start down the exciting road to home ownership.  The rates are similar to traditional conventional conforming loans, and minimal down payments are required to complete the transaction.

Contact us Today to see if an FHA loan is right for you!

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