Friday, July 16, 2010

What is an FHA loan?

Back in the 1930's, the housing industry was flat.  Two million workers had lost their jobs, mortgages were hard to qualify for and satisfy, and only four in ten households owned homes.  (Sounds eerily familiar, huh?)

In 1934, Congress started the Federal Housing Administration (or FHA) to help families buy homes by insuring the loans that the banks offer to buyers.  This, in turn, allowed the banks to offer lower rates with minimal risk of losing money.  Since then, the FHA has insured over 34 million home mortgages.

With FHA loans:

  • Your down payment can be as low as 3.5% of the purchase price;
  • Most of your closing costs and fees can be included in the loan.
There are also many different applications for FHA loans:
  • Help make your home energy efficient;
  • Help you purchase a home in a rural area;
  • Include the cost to repair a "fixer-upper";
  • Help you re-build your home if you have been hit by a disaster.
If you are looking to purchase a home in the Kansas City area and have questions about FHA loans, feel free to contact me!

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