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One common misconception about FHA home loans and FHA refinance loans is that the FHA itself is the lender and issues money to the applicant. But this is not true.

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FHA Loan Articles

News and Updates for Homeowners

Who Processes My FHA Loan Application?

April 16, 2013 - If you are new to FHA home loans, you may have questions like this one:

"Do all FHA loans, down payments, and everything regarding my future home have to be dealt with an authorized lender or can I deal with FHA directly? If this is the case, where do I have to send all paperwork?"

One common misconception about FHA home loans and FHA refinance loans is that the FHA itself is the lender and issues money to the applicant. But this is not true.
The answer to the type of question above is simple-all FHA loans and FHA refinance loans are handled via a participating lender.

When you want to apply for an FHA mortgage, you will submit an application via the participating lender, who processes the paperwork and submits it to the FHA where required. Some lenders have the authority to approve certain types of FHA loans without "prior approval" from the FHA while other loan types must be submitted to the FHA for further approval where appropriate.

FHA single-family mortgage loans do not have a "direct application" process where the borrower submits loan paperwork directly to the FHA. As mentioned above, FHA does not lend money to borrowers. It also does not set or maintain mortgage loan interest rates, or accept payments on FHA mortgage loans. These things are all accomplished or negotiated via the financial institution.

With regard to the actual FHA loan application, all paperwork is filled out either online or on paper and submitted to the participating lender. The lender and borrower negotiate an interest rate based on what's reasonable and customary in the market you're applying for the loan in, and the borrower gets a calculation on the down payment (a minimum of 3.5% in most cases.)

Any borrower who experiences problems with a participating lender or who are turned down for an FHA loan can try other lenders-nothing forces you to deal with a specific lender unless there has been a borrower-signed binding agreement such as a purchase contract or loan agreement specifically stating otherwise. For more information or assistance with the FHA loan process, speak to a loan officer or contact the FHA directly at 1-800 CALL FHA.