FHA Growing Equity Mortgages are home loans that are tailored for first time homebuyers or young families. These likely homebuyers are often not in a position that would warrant them being able meet the many upfront and monthly costs that are involved.
FHA's Section 245(a) enables those who currently have a limited income but expect their monthly earnings to increase, to purchase a home with the help of a Growing Equity Mortgage in which payments start small and increase gradually over time. As the mortgage payments grow the additional payment is applied toward the principal on the loan thus reducing the mortgage term. Growing Equity Mortgages also allow homeowners who are interested in further reducing the term of their mortgage to apply scheduled increases in their monthly payments to the outstanding principal balance.
Through the Growing Equity Mortgage program first-time homebuyers and others with limited incomes can start out with a low monthly mortgage payment that will increase gradually over time therefore allowing them to purchase a home sooner than they would be able to through conventional financing programs.
Each of the five Growing Equity Mortgage plans provides for monthly payments to be increased by a fixed percentage during each year of the loan. The initial year's payments to principal and interest are based on a 30 year level payment schedule. Thereafter the amount of the monthly payments for the next 12 months will increase each year by between 1 and 5 percent depending on the plan selected. The actual term of the mortgage will not exceed 22 years and may be less depending on the specific Growing Equity Mortgage plan and interest rate selected.
There are many reasons to consider your FHA refinance options. The most obvious is if you are at risk of going into default or foreclosure on your current home loan.
There are many reasons for homebuyers to investigate an FHA home purchase. Your loan is guaranteed by the government, making your application more attractive to lenders.
FHA Streamline loans can help homeowners lower monthly mortgage payments and interest rates. But what do you need to qualify for an FHA Streamline loan? To begin, you need an existing FHA mortgage to refinance.

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Remember, the FHA does not make home loans. They insure the FHA loans that we can assist you in getting.
FHA.com is a privately owned website that provides information about FHA guaranteed home loans, and is not associated with the federal government or HUD / FHA.
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