[W457]What Is An Fha Loan

FHA loans have allowed Americans to borrow money for home buying that they may not otherwise be able to afford. The FHA loan program started in 1934 during the Great Depression when foreclosures were at an all time high and many people were defaulting on their mortgages. FHA loans were put in place to provide lenders with insurance for home owners. At the time, some of the FHA loan programs were subsidized by the US government, however the long-term goal was to make the program self supporting based on the premiums paid by the borrowers.

Later on in the years, private mortgage insurance companies came to fruition making the FHA a primary service for people who can't afford a standard down payment or who do not qualify for private mortgage insurance.

In 2007, many borrowers were hurt by the subprime mortgage financial crisis, and on August 31 of that year, the FHA added FHA-Secure, a new refinancing program.

For many Americans, the reasons for using FHA loans include:

Purchasing a home, including first time buyers

Repairing or renovating a home they currently own

Making a home more energy efficient.

Lenders can offer potential home buyers better deals when their mortgage is insured through the FHA loan program. With FHA loans you will find:

Lower down payment requirements

Lower closing costs

Easier qualification for mortgages based on credit.

The FHA can help you to purchase your first home as well by offering down payments as low as three per cent of the price of the home. Another benefit of FHA loans is that the majority of the closing costs associated with buying a home can be included in the loan ? this means less money out of pocket for you when closing the deal on your new home.

If you're looking to purchase an older home that needs some renovations, you can purchase the house, fix it and include the reparation costs all in one loan. Likewise, if you own a home that requires renovations, your FHA loan can refinance your current mortgage and include more funds for the costs of repairs all in one loan.

The FHA also offers an energy efficiency loan to make your home more efficient in the usage of energy. You can even use an FHA loan to purchase mobile or manufactured homes, even those that are, or will be, located in a mobile home park.

For seniors over the age of 62 who live in their own home, own it outright or have a low balance on their loan, the FHA offers a reverse mortgage to allow seniors to convert some of the equity built into the home into much needed cash.

FHA loans help Americans own the homes of their dreams in an affordable way ? you can own your own home in Arizona today with an FHA secured loan.