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It's Loans Galore at Federal Housing Administration

Want to buy a house, but not sure if you'll be able to find a reasonable loan? The Federal Housing Administration wants you to buy a home, and they are prepared to give you more financing options than ever to help you achieve home ownership.

The Federal Housing Administration (FHA) is a wholly owned government corporation, established under the National Housing Act of 1934 to "improve housing standards and conditions; to provide an adequate home financing system through insurance of mortgages; and to stabilize the mortgage market. In 1965 the FHA was consolidated into the newly established Department of Housing and Urban Development (HUD).

The FHA wants you to buy a home, and they are prepared to give you more financing options than ever to help you achieve home ownership. The following are just a few of the options offered by the FHA: 

The 203(b) loan is the most commonly used FHA program. It offers a low down payment, flexible qualifying guidelines, limited lender's fees, and a maximum loan amount.

A 203(k) loan enables the homebuyer to finance the purchase and the rehabilitation of a home through a single mortgage. Part of the loan is used to pay off the seller's existing mortgage while the remainder is placed in an escrow account and released as the rehabilitation project is completed. In order to qualify for this loan, the home must be at least one year old, the cost of rehabilitation must be at least $5,000, and the total property value (including the cost of repairs) must fall within the FHA maximum mortgage limit. 

The FHA also provides an Energy Efficient Mortgage which allows homebuyers to save future money on utility bills. The cost of incorporating energy-efficient upgrades to a new or existing home is financed as part of an FHA-insured home purchase. The cost of the improvements must be determined by a Home Energy Rating System or by an energy consultant, and the cost must be less than the anticipated savings from the improvements. Only one-and two-unit new or existing homes are eligible, while condos are not. The financed improvements may be five percent of the property value, or $4,000, whichever is greater. The total must fall within the FHA loan limit.

For those couples that are getting married, consider the Bridal Registry program, which works just like a department store bridal registry. It allows couples to register with a lender who opens up an interest bearing account. Then family and friends can deposit "gifts" of cash into the account, and the account can then be applied toward a down payment for a home. 

Visit the FHA website (www.hud.gov) to learn more about these and other programs. They even offer special programs for disaster victims, urban areas, and members of the armed forces.

Sources include: The Department of Housing and Urban Development, www.hud.gov; www.doityourself.com