If you're a newcomer to real estate transactions, a myriad of different terms and information exist for you to learn. You may be under the impression that it's impossible to purchase a home, given your current financial situation, which has the potential to be all-encompassing and worrisome. You can get help from government programs if you're in a situation like this, though. Familiarize yourself with the FHA.
The FHA stands for the Federal Housing Administration. It is a government program founded during the Depression era in the 1930s to help citizens affected by the economic crisis buy homes. Starting in the 1960s to present, however, the FHA's main purpose has been to help citizens with low to moderate income levels secure housing loans. These individuals may also have poor credit and no money saved up to make a down payment.
The Federal Housing Administration is able to offer such loans, because they insure the lenders who are directly providing the loan to the new home owner. If the new home owner stops making payments to their lender, the FHA will cover the loss that the lender suffers. The FHA, as a result, is the only government program that is one hundred percent self-sufficient in that regard. Taxpayers pay no money to keep it operating. Over the years, the FHA has made housing available to thousands of families who otherwise wouldn't have been able to afford a home of their own.
While the standards for mortgage approval are lower under the FHA program, requirements must still be met. One of these requires the person taking out the loan to be able to put down 3% of the loan amount in cash. This might be too much for some people to be able to come up with. Also, while you don't have to have a perfect credit score to qualify for an FHA loan, you can't have had a foreclosure on a previous home within the past three years.
Whether or not an FHA loan is right for you depends, then, on several factors. You still need to meet certain requirements in order to qualify for this type of loan. If you do have a poor credit score or a modest income, though, an FHA loan is definitely worth looking into.
The FHA stands for the Federal Housing Administration. It is a government program founded during the Depression era in the 1930s to help citizens affected by the economic crisis buy homes. Starting in the 1960s to present, however, the FHA's main purpose has been to help citizens with low to moderate income levels secure housing loans. These individuals may also have poor credit and no money saved up to make a down payment.
The Federal Housing Administration is able to offer such loans, because they insure the lenders who are directly providing the loan to the new home owner. If the new home owner stops making payments to their lender, the FHA will cover the loss that the lender suffers. The FHA, as a result, is the only government program that is one hundred percent self-sufficient in that regard. Taxpayers pay no money to keep it operating. Over the years, the FHA has made housing available to thousands of families who otherwise wouldn't have been able to afford a home of their own.
While the standards for mortgage approval are lower under the FHA program, requirements must still be met. One of these requires the person taking out the loan to be able to put down 3% of the loan amount in cash. This might be too much for some people to be able to come up with. Also, while you don't have to have a perfect credit score to qualify for an FHA loan, you can't have had a foreclosure on a previous home within the past three years.
Whether or not an FHA loan is right for you depends, then, on several factors. You still need to meet certain requirements in order to qualify for this type of loan. If you do have a poor credit score or a modest income, though, an FHA loan is definitely worth looking into.
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