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FHA

FHA, the Federal Housing Administration was established according to the National Housing Act of 1934 and today it is one of the largest mortgage insurance providers in US. FHA is the government agency that works to uplift the housing market in US. Till date FHA has helped many homeowners in fulfilling their dream of owing a home.

If we go back in the history we will see that during the Great Depression the banking was the one sector that was hit very hard. The economic crisis was so big that real estate sector saw major foreclosures. Along with this there was no refinancing option to save the homes. Also the job loss was also all time high. The FHA came into being in this chaotic banking which was said to regularize the rate of interest. But FHA during that time also became biased in giving loan. More of the FHA loans were given to white American living in suburbs. This had led to the urban drop that included many important cities of America.

The year 1965 can be called as the turning point of FHA. In this year it became the part of the Department of Housing and Urban Development . The FHA loan programs had assisted veterans and their families with homes during 1940s. After this FHA had provided homes for the elderly, low income and handicapped people during 1950s, 1960s and 1970s. Till date FHA and HUD have the credit of provided mortgage insurance to about 34 million mortgages.

FHA Mortgage Limits

The FHA set the mortgage limits. No one can take more amount than given in the loan limits. These limits are county based. But the Metropolitan Statistical Area gets the FHA loan limits as per the highest price of the home in that area. There are many kinds of FHA loan program that are available these days. This include fixed rate mortgage, adjustable rate mortgage, FHA reverse mortgage, refinance mortgage etc.

Obama Mortgage Program

In year 2009, Making Home Affordable program is constructed by the Obama Administration. Refinancing is the center point of this program, which will help the homeowners in saving their homes from foreclosures. This is most commonly called Obama Mortgage. For this there are certain criterias that must be fulfilled. This include:
  • Current on mortgage payment
  • Using home as a primary residence
  • Fannie Mae and Freddie Mac should finance the loan

FHA Mortgage Insurance

FHA Mortgage Insurance is one thing that is done extensively by the Federal Housing Administration. This helps both the lenders and borrower. Lenders get the surety of the payment and borrowers get the home loan easily. The FHA insurance is charged annually and it is just 0.5% of the total loan amount with 1.5% as upfront premium mortgage.

Requirements of FHA Loan

For getting the FHA loan insurance it is good to collect all the relevant documents forehand in order to succeed. This include the following:
  • Address proof where you are living for the past two years
  • Employers' name and location
  • Social Security Number (SSN)
  • Present gross monthly salary
  • Saving and checking account information
  • W-2 for for the last two years
  • Any other real estate owned and value of your personal property
  • Open loan information
  • For veterans - DD-214 and Certificate of Eligibility form
Along with this also provide the credit report, property's appraisal, personal tax return (For the last two years), business balance sheet and current income statement.

Also before taking the FHA loan make sure to get complete information on closing cost, monthly mortgage amount, grace period and the actual cost of FHA loan. Along with this, if there is any doubt in your mind regarding FHA loan insurance then clear it before signing the documents. Never make any decision in haste.

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