The Federal Housing Administration was started in 1934 to improve housing conditions in America, and more than 70 years later, that is still exactly what they are doing. They provide loans for purchasing houses as well as programs to refinance a house that you are already living in but need to refinance. One of their most popular types of financing is the FHA home loan going to first time homeowners.

In any given year, somewhere around 75% of the financing approved by the Administration goes to first time homeowners. Younger people who are looking to own their first homes are frequently daunted by house prices and the available financing options. When you look at a mortgage plan and it says 30 years, some people start to feel a little faint in the head. For a lot of first time homeowners, the prospect of paying for their house over 30 years means that they will be paying their house off for longer than they have been alive. This prospect is, understandably, sometimes a baffling one.

The folks at the Federal Housing Administration work with a variety of clients looking to buy a house or to refinance their current house. Their rules are quite simple when it comes to who can finance a house and who can not, but one rule to keep in mind is that borrowers can only hold one FHA home loan at a time. So if you are looking to finance a second residence, but are still paying for your first house, the Federal Housing Administration will not be able to help you out. Of course, this stipulation does not affect first time homeowners.

The financing plans given to first time homeowners are identical to those given to others, with the exception of those who have lost their residence in a disaster. Only disaster victims can obtain a financing plan without putting down any percentage of the purchase price. For all other borrowers, including first time homeowners, the amount that has to be put down up front is 3% of the total purchase price.

Beyond that universal 3% down payment for an FHA home loan, your interest percentage will depend on many factors. Starting interest rates are between 6-6.5%, but there are a lot of additional factors that are taken into consideration when calculating what the exact interest rate will be for each customer. Your credit score is considered, as well as the amount you are financing, whether or not you have a co-borrower (non-resident) and whether or not the house you are financing is a manufactured one.

If you are in the market for becoming a first time homeowner, and are not quite sure where to start, contact the folks at HCI Mortgage who specialize in helping clients with an FHA home loan. You can visit the website at http://www.fhatoday.com for more information and to easily fill out the application online.