The FHA has helped thousands of people across the country to buy their homes. Out of the FHA’s loan programs, the most popular of all is the Single Family under section 203(b).
Also known as FHA’s Standard or Basic Program, section 203 (b) has important features to familiarize oneself with. First of all, this program boasts of significantly lowering payments to as little as 3%. This is possible through the FHA’s property value financing of up to 97%. Second is that it finances majority of closing costs, which are the fees associated with buying a home, thus reducing the property’s price. However, all of these are not for free. Borrowers pay an up-front premium upon purchasing the insurance. They also pay for the monthly premiums not financed. All of these are added to the mortgage payment. The next feature is that the FHA imposes limits on some of the fees charged by mortgage companies in making loans. And the fourth and last feature is that the FHA sets limits on the mortgage loan’s dollar value to make sure that it can be afforded by the lower economic class.
An important fact to keep in mind is that the FHA loan is strictly for homes intended for dwelling and may be used as long as the borrower does not have another FHA insured loan in his name. The only property types allowed are Single Family Real Estate Homes (SFR), Condominiums (approved complexes less than 4 stories) and Public Urban Developments (PUD), all of which should be located in HUD approved projects. One of these properties may be purchased as a primary residence. In addition, the borrower may still rent property that is not FHA financed.
Section 203(b) is the centerpiece of all FHA Loans programs. It is an important tool that provides an opportunity for people, especially those of the lower economic class, to become satisfied homeowners. Prospective buyers should make the necessary inquiries in order to clarify and iron out details, and get more comprehensive information.
Check out more FHA Loans Information here.
Also known as FHA’s Standard or Basic Program, section 203 (b) has important features to familiarize oneself with. First of all, this program boasts of significantly lowering payments to as little as 3%. This is possible through the FHA’s property value financing of up to 97%. Second is that it finances majority of closing costs, which are the fees associated with buying a home, thus reducing the property’s price. However, all of these are not for free. Borrowers pay an up-front premium upon purchasing the insurance. They also pay for the monthly premiums not financed. All of these are added to the mortgage payment. The next feature is that the FHA imposes limits on some of the fees charged by mortgage companies in making loans. And the fourth and last feature is that the FHA sets limits on the mortgage loan’s dollar value to make sure that it can be afforded by the lower economic class.
An important fact to keep in mind is that the FHA loan is strictly for homes intended for dwelling and may be used as long as the borrower does not have another FHA insured loan in his name. The only property types allowed are Single Family Real Estate Homes (SFR), Condominiums (approved complexes less than 4 stories) and Public Urban Developments (PUD), all of which should be located in HUD approved projects. One of these properties may be purchased as a primary residence. In addition, the borrower may still rent property that is not FHA financed.
Section 203(b) is the centerpiece of all FHA Loans programs. It is an important tool that provides an opportunity for people, especially those of the lower economic class, to become satisfied homeowners. Prospective buyers should make the necessary inquiries in order to clarify and iron out details, and get more comprehensive information.
Check out more FHA Loans Information here.
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