Created by the National Housing Act during the Great Depression of the 1930s, the Federal Housing Authority (FHA) aims to help people acquire the necessary finances to purchase their own homes. It is an assistance mortgage loan insured to and issued by qualified federal lenders only. Since its approval and establishment, the FHA program has helped countless of Americans, especially those who belong to the lower income bracket, and now focuses on aiding those who are incapable of paying for traditional down payments and loans. It is expected that more people are going to benefit from this program due to the fact that the Obama Administration recently approved a tax credit of $8000 to first time homeowners.To benefit from the FHA program, the first step is to inquire as to which lenders and/or mortgage brokers originate FHA loans. Rates and terms vary with each lender, so it is encouraged to make thorough comparisons. Second, the potential lender will assess and analyze the home buyer for risk and determine the type of home that can be afforded based on factors like monthly income, expenses, payment history and debts. The required documents are as follows: (1) two-year history of employment (the last two years of schooling can be used if one is currently working in his field of study); (2) credit scores of above 620 for conventional financing, and 580 for FHA; VA follows a case by case basis. If there is no credit history, documents that establish good credit payment (e.g. bills and rental history) may be used; (3) proper identification as defined by the Patriot Act (State Driver’s License or Birth Certificate with a copy of Social Security card) and; (4) debt ratio of below 36/46.
Qualifying for an FHA loan promises a higher chance of acquiring an excellent mortgage deal from respective lenders. This is because the FHA itself insures the loan the home buyer makes. With the help of the FHA program, potential buyers pay lower down payments and closing costs, and actually get to own their homes legally. People are no longer necessarily hindered by economic recession and mortgage loan denials, making the dream of owning a home within reach.
Check FHA Loans Information for more.
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