Type of FHA Loans

FHA Loan Type Highlights:

Section 203(b)

  • largest of FHA’s single family programsthCA7PV2QE
  • 1-4 unit properties are eligible
  • flexible credit requirements
  • 3.5% down payment allowed
  • down payment may be a gift from specific sources

Section 234(c)

  • provides mortgage insurance for individual condominium units
  • credit, down payment and limits of 203(b) apply
  • in 2010, condominium complexes must be approved through HRAP/DELRAP to be eligible for FHA insurance

Section 203(k)

  • primary program for property rehabilitation
  • encourages community and neighborhood revitalizationthCAIP5FT8
  • only 1 mortgage loan is used for both the acquisition and the renovation
  • 1-4 unit properties including condominiums are eligible; check with your lender for manufactured housing eligibility
  • required improvements include cost effective energy conservation standards and smoke detectors
  • consultancy may be required

HECM – Reverse Mortgages

  • FHA was the first to promote reverse mortgages nationallythCAX404QF
  • allows access to equity in property with flexible terms
  • lump sum, monthly payments, line of credit or a combination available
  • limited to homeowners 62 years of age and older

 

FHA programs go beyond the scope of the previously listed programs. They offer a Streamline Refinance as well as a Streamline 203(k) for limited repairs. Also, recent legislation has helped FHA offer special programs with incentives to lenders for modifying and refinancing existing mortgages like with the “Making Home Affordable Program.”

When looking for a loan program to fit your specific needs, take a close look at FHA as their programs have become more attractive to both lenders and consumers.

With favorable loan terms, higher loan limits, 30 year fixed repayment terms and flexible down payment options, FHA will continue to encourage home ownership, provide liquidity and stability to the mortgage market.

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