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.
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A Home Loan specialist with over 25 years experience. She can help you find the best loan program that meets your needs.