There are a wide range of mortgages available for home buyers to consider. FHA home loans are just one option and are especially helpful to those who may not necessarily qualify for other loans with stricter requirements. However, some people aren’t that familiar with the FHA and the mortgage financing assistance it provides.
Here are four facts about FHA home loans to help you learn more:
1. They were created to help more people become homeowners.
FHA home loans are regulated by the Federal Housing Administration. This government agency and mortgage insurer, which is a part of the U.S. Department of Housing and Urban Development, was established in 1934 to help “maintain and expand homeownership,” as well as “contribute to building and preserving healthy neighborhoods and communities.”
2. There are different types of FHA home loans.
The FHA doesn’t offer just one type of mortgage loan—there are several variations home buyers could qualify for. This includes the 203(k) loan, which is ideal for people who are interested in buying a fixer upper, and the FHA reverse mortgage, which is specifically offered to older homeowners.
3. The limits don’t always stay the same.
Like any other mortgage loan, the FHA loans have limits. But these limits can change. In fact, in December of last year, the FHA announced it would be increasing its loan limits, effective in January 2018 until the end of the year.
4. Only certain mortgage lenders are able to provide this type of funding.
The Federal Housing Administration doesn’t offer FHA home loans to people themselves—they instead insure the loans and have certain mortgage lenders provide them to home buyers. As a result, you can only obtain this home financing option from an FHA-approved lender. If this is the type of loan you’re interested in receiving, be sure to find out what lenders near you can actually provide it to you.
Want to get pre-approved? Here’s a list of information and documentation you should be prepared to supply when applying for an FHA home loan.