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The most popular FHA home loan is the fixed-rate loan known as the 203(b). It often works well for first-time homebuyers. It allows individuals to finance up to 96.5% of their home loan and helps to keep down payments and closing costs.

FHA Loan Programs for 2022

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FHA.com is a privately owned website, is not a government agency, and does not make loans.

Fixed Rate FHA Loans

The Popular 203(b) Federally Guaranteed Mortgage

Get the Full Story About FHA Loans

Home ownership rates in America continue to increase at a steady rate due in a large part to the implementation of FHA home loans insurance program. Over the years, FHA has helped Americans gain the financial independence that comes with owning a home. By creating jobs and reasonable mortgage rates for the middle class, financing military housing, and producing housing for the low income and the elderly, FHA has helped Americans become some of the best housed people in the world with a homeownership rate of 64.2% for Americans currently owning their own homes. FHA has insured more than 46 million home loans since 1934.

HOW IT WORKS

By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA's mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines.

FHA loans benefit those who would like to purchase a home but haven't been able to put money away for the purchase, like recent college graduates, newlyweds, or people who are still trying to complete their education. It also allows individuals to qualify for a FHA loan whose credit has been marred by bankruptcy or foreclosure.

NUTS AND BOLTS

The most popular FHA home loan is the 203(b). This fixed-rate loan often works well for first-time homebuyers because it allows individuals to finance up to 96.5 percent of their home loan which helps to keep down payments and closing costs at a minimum. The 203(b) home loan is also the only loan in which 100 percent of the closing costs can be a gift from a relative, non-profit, or government agency.

FHA will collect the annual MIP, which is the time on which you will pay for FHA Mortgage Insurance Premiums on your FHA loan. Cancellation of the premiums are as follows:

  • No more than 15 year term
    Loan to value at closing up to 90%
    11 year termination
  • No more than 15 year term
    Loan to value at closing greater than 90%
    No cancellation until loan paid off
  • Greater than 15 year term
    Loan to value at closing up to 90%
    11 year termination
  • Greater than 15 year term
    Loan to value at closing greater than 90%
    No cancellation until loan paid off

GUIDELINES

It is not necessary to meet a minimum income requirement in order to qualify for a FHA loan but debt ratios specific to the state in which the home will be purchased have been put into place to prevent borrowers from getting into a home they cannot afford. This is done through a close analysis of income and monthly expenses.

FHA Loan Programs

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FHA Loan Articles and Mortgage News

Adjustable Rate Mortgage Pros and Cons

November 17, 2022 - he reason many apply for an FHA Adjustable Rate Mortgage (FHA ARM) option is because they want to take full advantage of the intro rate or teaser rate, and plan to refinance later on when the mortgage rate environment is more borrower-friendly.

FHA Loan Approval Changes Could Help First-Time Borrowers

November 16, 2022 - The FHA and HUD announced changes to FHA loan approval procedures for first-time homebuyers. The changes essentially give a participating FHA lender the ability to consider qualifying positive rental payment history as a factor in loan approval.

Questions to Ask Your Lender Before Buying a Home

November 14, 2022 - If you are planning to build or buy a home with an FHA loan, there are some questions you want answered before you commit to a particular lender. Some of the answers may be common among participating lenders, and others may vary.

FHA Home Loan Options When Interest Rates Are High

November 6, 2022 - FHA home loans are government-backed, which means less risk for the lender if the borrower defaults on the mortgage. That is one reason why these mortgages feature lower interest rates than many conventional mortgages--the lender takes less of a chance when approving your home loan.

Considerations When You Renovate Your Home

November 3, 2022 - If you want to buy a fixer-upper or renovate a home using an FHA 203(k) Rehabilitation Loan, there are some issues affecting your loan that you might not expect when you start planning and saving for your loan.