Your Barksdale AFB and Bossier City Community Real Estate Expert

What is FHA mortgage insurance?

The Federal Housing Administration (FHA) insures mortgages offered by banks, savings associations, and other financial institutions. An FHA-insured mortgage is backed by the full faith and credit of the United States government. While FHA does not make loans, it benefits the homebuyer by providing mortgage insurance which encourages financial institutions to make affordable financing available.

What are the benefits of an FHA mortgage?

FHA offers low down payment options, eligibility with less than perfect credit, a loan at a reasonable cost, and help if there is ever trouble making the mortgage payment. Because an FHA mortgage insures the lender against loss, competitive with the best in your market and lower than the rates charged for subprime and other non-prime mortgage.

FHA not only helps people buy a home, but helps them keep it as well. In return for protecting lenders against loss, FHA requires financial institutions to offer assistance to borrowers experiencing difficulty making mortgage payments.

What about eligibilty?

In order to be eligible for an FHA-insured mortgage, a borrower must:

• Occupy the property as the principal residence;
• Possess a valid Social Security Number;
• Have a two-year employment history; School and military history count towards this two-year requirement
• Not be delinquent on any Federal debt such as a student loan or other FHA-insured mortgage;
• Meet flexible credit requirements.

There are several other features worth knowing about an FHA insured mortgage:

• The homebuyer and the seller, individually or jointly, can pay closing costs as agreed to in the sales contract. FHA no longer limits what closing costs the homebuyer is permitted to pay.
• Caps on payment and debt-to-income ratios are more generous than most standard conforming mortgage products. The payment-to-income ratio may not exceed 43%
• A minimum credit score is not required. In fact, one may not be turned down for an FHA mortgage solely for lack of credit history
• The buyer's entire cash investment- as little as three percent-can be a gift from a family member, employer, charitable organization, or local government entity
• The seller can contribute up to six percent of the home's price toward closing costs through a seller's concession.
• There are no prepayment penalties on FHA-insured mortgages
• U.S. Citizenship is no required but, for those who are not citizens, they must be lawful permanent or non-permanent resident aliens with a valid Soical Security Number.

HUD-Approved Housing Counseling Agencies

Homebuyers often have a lot of questions about getting an FHA-insured mortgage and about the home buying process in general. HUD-approved Housing Counseling Agencies provide buyers the opportunity to get the answers they need by meeting witha housing counselor at a HUD-approved agency in their community. These agencies offer homeownership counseling and financial literacy training at little or no cost. To find a counselor in your neighborhood, call 1.800.569.4287 or visit http://www.hud.gov/buying/index.cfm and click on "find a housing counselor" on the right under "counseling and education."

To learn more about these products or to find out if there are homeownership programs sponsored by your state or local governments and other community organizations, please visit FHA's website at www.fha.gov or call 1.800.CALL FHA.

Realtors and FHA--working together to help people fulfill the American dream

REALTORS and the Federal Housing Administration(FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), have been partmers in creating homeownership opportunities for more than 70 years. Since FHA was created in 1934, it has helped more than 34 million families become homeowners, many by working with their REALTORS to achieve their dream of homeownership.

Backed by the full faith and credit of the Federal government, FHA-insured mortgages are one of the safest and most affordable types of mortgages available to homebuyers. Working together, REALTORS and FHA help millions of families come home.

The National Association of REALTORS

"The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries. For more information, please visit www.REALTOR.org.

The Federal Housing Administration (FHA)-- which is part of the U.S. Department of Housing and Urban Development-- has been helping people become homeowners since 1934. FHA insures the loan, so lenders cna offer you a better deal. FHA offers loans with low down payments, that are easier to qualify for, and can cost less than conventional loans. For more information, please visit www.fha.gov.