Terms of Use What are FHA loans? The Federal Housing Administration (FHA) works to make home ownership a possibility for more Americans. The FHA is not a lender but rather an insurer of loans. The FHA issues guidelines to banks and credit unions to follow so that as long as a loan meets those terms, it agrees to insure against loss. FHA loans are attractive for first-time homebuyers who might not have saved enough for a down payment of 5% or more for a conventional loan or whose debt-to-income  More...

Terms of Use: The major reason to consider getting an FHA loan is because an FHA loan has less stringent criteria than those used by banks and credit unions for qualifying you for a conventional mortgage. As such, an FHA loan may provide an ideal choice for first-time home owners or individuals rebuilding their credit. For instance, the FHA allows you to use 31% of your income towards housing costs and 43% towards housing expenses and other long-term debt. With a conventional loan, this qualifyi  More...

Terms of Use The Energy Efficient Mortgage allows a homebuyer to save future money on utility bills. This is done by financing the cost of adding energy-efficiency features to a new or existing home as part of an FHA-insured home purchase. Basic guidelines for EEMs are as follows: The cost of improvements must be determined by a Home Energy Rating System or by an energy consultant. This cost must be less than the anticipated savings from the improvements. One- and two-unit new or existing home  More...

Terms of Use: Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan. The FHA requires a single, up-front mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium, paid monthl  More...

Terms of Use: The FHA allows you to use 31% of your income towards housing costs and 43% towards housing expenses and other long-tem debt. With a conventional loan, the qualifying ratio allows only 28% towards housing and 36% towards housing and other debt. How to calculate these ratios 1) MORTGAGE PAYMENT EXPENSE TO EFFECTIVE INCOME Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.). The  More...

Terms of Use: The U.S. Department of Housing and Urban Development (HUD) was established in 1965 to develop national policies and programs to address housing needs in the U.S. One of HUD's primary missions is to create a suitable living environment for all Americans by developing and improving the country's communities and enforcing fair housing laws. HUD helps people by administering a variety of programs that develop and support affordable housing. Specifically, HUD plays a large role in h  More...

Terms of Use: Under Title I, HUD insures lenders against most losses on home improvement loans. Given by a lender and insured by the FHA, a Title I loan is used to make non-luxury renovations and repairs to a home. It offers a manageable interest rate and repayment schedule. If the loan amount is under $7,500, no lien is required against your home. Title I loans feature terms up to 20 years on either single- or multifamily properties. The maximum loan amount is “$25,000 for improving a sin  More...