The Federal Housing Administration or FHA, insures loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages for single family, multifamily, manufactured homes and hospitals. It was established in 1934 and is the largest insurer of mortgages in the world; insuring over 34 million properties.

FHA mortgage insurance protects lenders against loss if the homeowner defaults on their mortgage loan. FHA will pay the lender if a homeowner defaults on their loan which gives the lender incentive in loaning to riskier borrowers. Loans must meet certain requirements established by FHA to qualify for insurance.

Unlike conventional loans, FHA-insured loans require small down payments. There is more flexibility in an FHA loan than conventional loans in calculating household income and payment ratios. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment. In most cases, the insurance cost will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property-whichever is longer.

FHA operates entirely from self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.

• FHA Refinance Mortgage
• FHA Purchase Mortgage
• FHA Purchase-Rehab Mortgage
• FHA Reverse Mortgage