FHA

Posted in General, January 22nd, 2007 |

Federal Housing Administration (FHA) is a part of the Housing and Urban Development (HUD). FHA offers different insured mortgages programs such as Section 203b Insured Mortgage, Section 255 Home Equity Conversion Mortgage (HECM)-Reverse Mortgage, Insurance Premium refunds, Graduate Payment mortgage Insurance (Section 245) etc. FHA also offers Down payment grants such as the AmeriDream, Nehemiah Program, Housing Action Resource Trust (HART), Consumer Debt Solutions and Partners in Charity. The FHA loan rates offered are 6.128% APR for 30 year fixed and 6.241% APR, for 15 Year Fixed.

Let us now consider some of the individual programs that are offered by FHA. The 203 (b) mortgage Insurance provides mortgage insurance for individuals who are going to purchase or refinance a property. The loan sanctioned is offered by a lending institution or a bank and it is insured by FHA (HUD). The Section 255 Home Equity Conversion Mortgage or reverse mortgage offered by the FHA can help senior homeowners age 62 and above to convert the equity of their home into a regular stream of income which is repaid when they no longer occupy the home. The FHA Premium refunds and Distributive share is a program under which the FHA commissioner decides how much of the premium should be refunded when a loan is terminated. There are certain criteria for qualifying under the premium refund program. The eligibility are that the loan should be acquired after 1^st September 1983, paid-up an upfront mortgage premium at closing and a non-defaulter on the mortgage installments.

The FHA also offers different down payment grants. The AmeriDream program of AmeriDream, Inc. offers low and moderate income families to help get home ownership. AmeriDream, Inc. is a non-profit organization that offers ten percent of the money for a mortgage down-payment or for closing a mortgage. The eligibility for the AmeriDream Inc program is that the individual needs to qualify for a loan from any financial institution. There is another program offered by the FHA which is known as HART. Under this program offered by Housing Action Resource Trust, potential homeowners are offered assistance to buy a home. The gift fund offered by HART can be up-to $15000 which is non-refundable.

The different schemes offered by FHA have help American’s build their own homes and live the American Dream. All these initiatives have led to a record 67.7 percent people in America owning their own homes in the year 2000. This figure of home ownership is the highest ever recorded in American History ever.