Greetings neighbors,

With the growing popularity of FHA loans amongst home buyers, there is a lot of misconception regarding these loans that are mortgages issued by qualified lenders and insured by the Federal Housing Administration. Take a look at some factors borrowers should know regarding FHA loans.

FHA loans are not only for borrowers in the lower-income bracket:

There is no income restrictions associated with FHA loans and they are available to everyone. However, borrowers are required to show proof of income and assets through proper documentation to ensure they will be able to afford a home.

FHA loans are not only for first time buyers:

FHA loans are for first time buyers, 2nd time buyers, 3rd time buyers, and so forth. Those in the market to buy a home can look into FHA loans as an option.

FHA loans are not necessarily small amounts; some can be over the amount of $700,000:

Recently there has been an increase in the maximum amount of the original cap of $362,790 to $793,750 of FHA loans by the government to help keep the housing market stabilized. Based on what county you live in determines the amount of money that can be borrowed.

FHA loans are not in conjunction with section 8:

Even though both programs are provided by HUD, FHA loans are not affiliated with section 8, these mortgages are only insured by the Federal Housing Administration. This insurance enables lenders to lend more freely knowing they will be repaid even in the event of a default by the borrower.

FHA loans are often more affordable than conventional loans:

Normally, borrowers will find that FHA loans offer the same interest rates as other loans however, FHA loans offer a lower down payment, some as low as 3.5%.