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The FHA is not funded by tax dollars, but from the revenue generated by FHA mortgage insurance. This cost is borne by the home buyer, but the insurance cost ends approximately five years later, or when the FHA mortgage balance is seventy-eight percent of the property value, whichever occurs last.

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October 16, 2018
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What is FHA Mortgage Insurance?

FHA Common Question #15

FHA mortgages are insured to protect lenders in case of a default on the FHA loan. An FHA mortgage is advantageous to the borrower because of the reduced cash investment needed to close on a home. The FHA mortgage is possible in part because the FHA is funded solely from income it creates itself.

The FHA is not funded by tax dollars, but from the revenue generated by FHA mortgage insurance. This cost is borne by the home buyer, but the insurance cost ends approximately five years later, or when the FHA mortgage balance is seventy-eight percent of the property value, whichever occurs last. Other home loans have more stringent requirements, but FHA mortgages have flexible payment schedules and more inclusive definitions of monthly income.

All of this may be quite confusing to a first-time home buyer. If you aren't sure why an FHA loan may be right for you, ask your lender to do a side-by-side comparison between the FHA mortgage and the current non-FHA versions. It will soon become apparent which is the best value for your money, especially if you don't have a lot to invest in a down payment.

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FHA Loan Articles and Mortgage News

Paying Off Your FHA Mortgage Loan Faster

October 10, 2018 - Depending on your financial needs and goals, it may be tempting to pay off an FHA mortgage faster than the term of the loan. This is a good idea if you need to save money over the lifetime of the mortgage-paying the full term of the loan means paying interest for that full term.

Which FHA Refinance Loans Require a New Credit Check?

October 7, 2018 - The short answer is that most of them do. There is only one FHA refinance loan that has no FHA-required credit check, and most typical FHA forward mortgages for purchasing a new property will require one. Credit scores and credit history are important factors for home loan approval.

Check Your Credit Report Before Applying for a Home Loan

October 5, 2018 - There are two basic stages for many borrowers thinking about applying for a mortgage loan. Whether you are choosing an FHA mortgage or any other type of home loan including refinance loans, there should be a planning stage and an application stage in your home loan process.

Are There FHA Loans for Investment Properties?

October 3, 2018 - This is a common question, and at first glance, FHA loan rules do prohibit using single family FHA mortgages to purchase investment real estate. But much depends on the buyer’s definition of investment property compared to the FHA view.

FHA Down Payment Rules and Options

September 30, 2018 - FHA home loans are attractive to many borrowers because the FHA guidelines are more forgiving with FICO scores, and a lower down payment is required than for some other mortgages. But your down payment requirements aren’t just set by the FHA; lender standards also have a say.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!