Using an FHA loan program is a fantastic way to buy property if you qualify. The FHA is a government-backed agency that helps people attain government insured loans. FHA assistance programs have a large variety of loans to help people meet their home ownership goals. With so many options, there is bound to be one that will fit your needs. Here are a few of the loan programs that are offered.
First Time Home Buyer
Buying your first home is a major step in your financial life. Doing it the right way is important. This is what the FHA first-time home buyer program is all about. This is referred to as the 203(b) loan program. With this program you can secure your first residence with a very small down payment. This allows more people to qualify for their first home without spending a lot of money out of pocket. To obtain this type of loan, go to almost any lending institution in the marketplace. They write the loan and the government insures it for them. This takes the risk away from the bank and puts it on the government.
Buying a fixer-upper with a traditional loan is not always that easy. Most of the time, buying this type of property requires the buyer to have a lot of cash in reserve. The bank wants most houses in this condition to be fixed prior to the loan. However, you cannot fix something that you do not own. The 203(k) program takes care of this problem. They will allow you enough money to purchase the property and make the repairs that you need. This makes life a lot easier for those looking to buy a fixer-upper.
Home Equity Conversion Mortgage
A home equity conversion mortgage is the FHA's version of a reverse mortgage. A reverse mortgage is when the bank pays you the money on a mortgage instead of you paying them. The equity is slowly purchased by the bank and then at the end of the mortgage a balloon payment is due. You can pay the balloon when you sell the house or when someone in the house dies. You cannot be forced out of the home by the bank, but the bank will own the rights to the home after the equity has been bought out.
With this type of loan, it does not matter if you have good credit or a sufficient income. As long as you have a house that is paid for and you are over the age of 62, you will likely qualify. This is perfect for retired people that are looking for some extra income.
HUD also offers a few other special programs in their mortgage portfolio. One such package is for energy efficient homes. You can receive a special incentive if you choose to make your home energy efficient. Another department that they have is the manufactured homes and mobile home assistance program. With this program they aim to make these structures safer to live in.