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HUD Loans VS Insured Government Loans

FHA home Loans are insured government loans.

An FHA loan is a loan insured by the Federal Housing Administration (FHA). If you default on the loan, the FHA will repay the bank’s loss. FHA is a component of HUD.

Since the loan is insured, the lender can offer you good terms including:

  • a low down payment (as low as 3.5% of the purchase price)

  • the financing of some closing costs (which means they are included in the loan amount), and

  • low closing costs.

This type of loan is often easier to qualify for than a conventional mortgage and anyone can apply. However, FHA loans have a maximum loan limit that varies depending on the average cost of housing in a given region.