| Heard of an FHA loan, but aren't sure exactly what | | | | you'll have to pay for mortgage insurance, which is |
| one is, how it's different from a conventional loan or if | | | | approximately 1.75% of the loan amount of a 30-year |
| it's right for you? Maybe we can help. | | | | loan. You can, however, wrap this into your mortgage |
| So what is the FHA? The FHA, or Federal Housing | | | | payments, and the interest you pay on the mortgage |
| Administration, is a group that manages the | | | | for your primary residence is tax deductible. |
| government home loan insurance program. The FHA | | | | For many home buyers, the benefits of an FHA loan |
| insures loans granted to home buyers who might not | | | | definitely outweigh any disadvantages. And even |
| otherwise qualify for a loan and assumes the risks | | | | though FHA loans are great for first-time home buyers, |
| associated with the loan for the lender. | | | | they aren't the only ones who can benefit from an |
| FHA loans are a great option for first-time home | | | | FHA loan. As long as you meet the loan requirements, |
| buyers, mainly because an FHA loan is easier to get | | | | you can qualify for an FHA loan, whether you're buying |
| than a conventional loan. There are several reasons | | | | a home for the first time or the fourth time and |
| for this: | | | | whether you're purchasing or refinancing a home. |
| 1. Your credit score doesn't have to be as high | | | | So how does an FHA loan apply to REO homes? |
| with an FHA loan, so it's easier to qualify. | | | | With the FHA's Section 203(k) loan program, home |
| 2. Your required down payment will be less with | | | | buyers can finance a home and the costs to renovate |
| an FHA loan. | | | | the home in one loan, the amount of which is based on |
| 3. You can use money given to you by a family | | | | the projected value of the home once the renovation |
| member, a government agency, or a non-profit | | | | is done. This is perfect for homes that may be in need |
| organization for your down payment on an FHA loan. | | | | of repair, as REO homes often are. |
| A disadvantage to getting an FHA loan is that the loan | | | | The FHA is part of the Department of Housing and |
| limits with FHA loans are usually lower than with | | | | Urban Development (HUD). You can find out more |
| conventional loans. However, under the American | | | | about qualifying for an FHA loan, what documents |
| Recovery and Reinvestment Act, FHA home loan | | | | you'll need to provide your lender, loan limits in your |
| limits will be raised to $271,050 for single family units in | | | | area, and more specific information about financing an |
| low-cost areas and to $729,750 for single family units | | | | REO home with an FHA loan when you visit the HUD |
| in high-cost areas for credits issued from January 1, | | | | website. |
| 2010 until December 31, 2010. Loan limits differ by | | | | To get the best deals on REO homes for sale, try |
| state, so check the loan limits for your state on the | | | | online bidding – the new, easy way for anyone to |
| Another thing to keep in mind is that with an FHA loan, | | | | find an purchase REO properties across the country. |