The Federal Housing Administration, more commonly known as the FHA, has helped countless Americans since its creation in 1934. Formed as a response to the Great Depression, the FHA insures loans for low- to moderate-income home buyers. The FHA does not actually lend the money to borrowers; it guarantees that the lender will be repaid if the borrower is unable to do so. Because of this insurance, lenders are more likely to give loans to individuals who may not otherwise be able to secure a loan, or at least not one with a decent rate. Instead of looking at applicants’ credit scores, other factors, such as employment records and utilities payments, are considered.
As with all loans, it’s critical for the borrower to understand all of the requirements and terms of a loan. Today, many are blaming the recent sub-prime loan “bust” on a lack of education and understanding. In response to this need, the Mortgage Loan Place has issued a free downloadable FHA Guide to help educate borrowers about FHA loans and the lending process. The guide includes detailed background information, eligibility requirements, alternatives to FHA loans, and step-by-step instructions to obtaining an FHA loan. The guide, which has been downloaded over one thousand times, is one step towards realizing the dream of homeownership.