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FHA loans provide homeownership access to first-time buyers and those with moderate income. FHA refinance programs allow homeowners with little equity to refinance their home loans to new mortgages with better terms.

FHA Loans: Helping Home Buyers, Homeowners, and Communities

FHA home loans are a great choice for first-time home buyers with little funds for their down payment; they also offer affordable and stable mortgage terms to borrowers who may not qualify for a mortgage under conventional loan approval requirements:

  • First-time and moderate income buyers: Although FHA does require a stable employment or income history, it considers more than credit scores and reports when approving home loans. Low down payment requirements make it easier for moderate income families to qualify for home loans.
  • Self employed and small business owners: In today's tighter credit environment, conventional lenders may balk at approving mortgages for small business owners or sole proprietors. Borrowers who can provide required documentation can often qualify for an FHA mortgage or refinance.
  • Non-traditional or challenged credit: FHA can approve loans for borrowers who've had a bankruptcy discharged at least two years prior to applying or a foreclosure completed three or more years ago. Borrowers with minimal or no credit can prove their ability to repay a mortgage by documenting housing and utility payments and other proof of creditworthiness.
  • Homeowners stuck with non-standard mortgages: People who've financed their homes with sub-prime or otherwise non-standard mortgage loans may find their payments escalating beyond their ability to pay. Refinancing to an FHA mortgage with a stable fixed rate and consistent principal and interest payments can help homeowners gain control of their mortgage payments while eliminating features that make it difficult to pay down their mortgages.
  • Streamline refinance for current FHA borrowers: If you have an FHA loan, but cannot qualify for conventional refinancing due to loss of home value, unemployment, or other issues, FHA may be able to help with a streamline refinance.

FHA also offers combined rehabilitation/home purchase mortgages and assists communities through multifamily and community development programs. FHA works with approved mortgage lenders to provide borrowers with housing counseling and foreclosure prevention alternatives. If you need help with your FHA loan, an FHA approved lender or housing counselor can help with providing the assistance you need.

Karen Lawson
Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.