The Federal Housing Administration is one of the oldest and largest sources of mortgage assistance available to the general public. FHA loans are for the purpose of encouraging new construction and for helping people who might not otherwise be able to afford to purchase a home. FHA loans feature low down payments, usually five percent or less. To obtain FHA backed loans, buyers must qualify financially, and the property must be evaluated by an FHA approved appraiser. FHA loans are not actually made by the government, however, the government assures lenders that they will be paid if the borrower is unable to meet the payments. The borrower is required to buy insurance to cover the loan, so that in the case of default, the lender can recoup some of the loss. FHA does have certain loan limits based on different counties, but it is an attractive type of financing for the first time home buyer. For more information on FHA insured loans, contact a financial or real estate professional.
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