What is an FHA Loan?
The Federal Housing Administration (FHA) was established in 1934 to improve housing standards and to provide an adequate home financing system through insurance of mortgages. Households with poor credit that would otherwise be excluded from the housing market were finally able to buy the home of their dreams with an FHA Mortgage.
Today, FHA is particularly important to minority and first-time homebuyers. With the National Homeownership Strategy in place since 1995, FHA has placed a great deal of emphasis on marketing and outreach to minorities and first-time homebuyers.
How do I qualify for an FHA Loan?
To obtain an FHA loan you must be able to meet the following criteria:
- You must have a credit background that shows you meet your obligations.
- You must have enough income to pay your monthly debt.
- You must have enough cash to make a down payment at the time of closing.
- You must be able to pay the closing costs, which normally total 2-3% of the price of the home.
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