The Federal Housing Authority (FHA), which is a part of the Department of Housing and Urban Development (HUD), helps to support homeownership by underwriting loans for families with moderate to low incomes. The FHA does so by aiding first time home buyers and others that do not have the financial means to meet required down payments by furnishing mortgage insurance. Down payment requirements are generally less than traditional loans, and interest rates typically reflect current market rates. The FHA provides several loan programs that are available to home buyers with a steady income sufficient to make monthly payments, the financial resources needed to pay closing costs, and a satisfactory credit history. Not only can FHA loans be secured to buy a home, but they can also be used to remodel or repair a home or make a home more energy efficient.
FHA Programs Currently Available:
Section 203(b)
The most frequently used FHA program is Section 203(b). A Section 203(b) loan is a fixed mortgage. The loan terms available for this type of mortgage are between 10 and 30 years. Through this loan program, home buyers may purchase a new or existing 1 to 4 unit family home. Home buyers may also purchase condominiums or townhomes under this program government housing program. These properties can be situated in either rural or urban areas.
Section 234(c)
Another loan program offered by the FHA is a Section 234(c) loan. Borrowers can use this government loan to secure a HUD approved condominium project. This project may consist of more than one building. A FHA 234(c) loan may be used to purchase a building or group of building such as row apartments, townhouses, or high-rise buildings. The maximum insurable mortgage, minimum investment, mortgage term, and refinancing for a 234(c) loan are the same as those of Section 203(b) loans.
Section 237
HUD may, in some cases, insure Section 237 loans. These types of loans are for borrowers that have poor credit or are experienced other problems with their credit. Because of their troubled credit history, these borrowers do not meet HUD's standard credit requirements.
Section 203(k)
In addition to providing loans for the purchase of a home or condominium, the FHA also offers loan programs for home improvement. Section 203(k) mortgages are provided by the FHA to assist homeowners with refinancing or improving their home. The funds from this loan will be used to pay the homeowner's existing mortgage, and the difference will be placed in an escrow account. The money in the escrow account will be released to the homeowner until refinancing or renovations are completed.
| 
