A FHA mortgage allows some borrowers to qualify for the lower interest rates of a conventional loan, rather than using a higher rate sub-prime mortgage. This can save thousands in interest charges.

The FHA or Federal Housing Administration is now a part of HUD or House and Urban Development, which are responsible for making home ownership more accessible for more Americans. What is great about the FHA, is that you do not have to have perfect credit or a high paying job. The payments are usually smaller than bank made loans, as well as the down payment needed towards a home is also much smaller than what would normally be accepted.

Qualifying for a FHA loan is surprisingly very easy! You must be able to meet the minimal credit requirements, plan to use the home as a primary residence, and of course can afford to make the monthly mortgage payments, which are often comparable to rent payments. You must be able to show a steady income for three years and have paid your bills on time. There is no limit on the amount of income that is needed to qualify.

 The FHA cash out Refinance(HARP) has been designed to complement Making Home Affordable by helping homeowners who have not been delinquent on their monthly mortgage payments, but are still unable to refinance and take advantage of the historically low mortgage rates due to the declining home values, thus raising their current loan-to-value (LTV) over 80%.

FHA helps low and moderate-income families purchase homes by keeping the initial costs down. By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA's mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines.

The FHA also limits fees that can be charged to the borrower. For example, the loan origination fee cannot surpass 1% of the mortgage amount. FHA loans are a very attractive mortgage option. Unlike a private mortgage, FHA loans are designed to cut you a major break so you can buy a home.

President Obama's $75 Billion Making Home Affordable housing stimulus program will assist as many as 9 million homeowners by either making their monthly mortgage payments more affordable, or by stemming foreclosure

FHA cash out Refinance loans will allow the flexibility necessary to make the refinance process quicker and more cost-effective for both the borrower and the lender. All HARP loans require less documentation for underwriting, and some HARP loans will not require an appraisal.

 

FHA Says Higher Down Payments Risks Double-Dip Price Decline - Wall Street Journal (blog) FHA Says Higher Down Payments Risks Double-Dip Price Decline Wall Street Journal (blog) An increase in down payments to 5%, from the current minimum 3.5%, would limit new FHA-backed loans by 40%, equivalent to 300000 fewer home sales, ... FHA considers down payment requirementsWashington Post US FHA chief says FHA not next subprimeReuters FHA Pressured to Require Larger Down PaymentsMortgage Rates & Trends (blog) Mortgageorb all 9 news articles » CashCall Mortgage Explains Why You Should 'Never Pay Closing Costs'... Traditional Lenders Upset That Industry Secret ... (Business Wire via Yahoo! Finance) ANAHEIM, Calif.----A recent radio ad by CashCall Mortgage seems to have struck a nerve with many competitors in the lending business. The commercial urges consumers ‘never to agree to pay closing costs,’ particularly for those refinancing at the same outstanding balance. Mortgage Rate Trend Index (Bankrate.com via Yahoo! Finance) Each week, Bankrate.com surveys experts to gauge which way interest rates are headed on mortgages.

Loan Facts - an agency of the US Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.