The Federal Housing Administration (FHA) runs several programs to promote home ownership. These programs are popular because they allow borrowers to buy a home with a smaller down payment than is required by most other lenders. FHA loans make it easier for people to qualify for a mortgage, but they are not for everybody.
An FHA loan is a loan insured against default by the FHA. In other words, the FHA guarantees that a lender won't have to write off a loan if the borrower defaults the FHA will pay.
The FHA promises to pay lenders if a borrower defaults on an FHA loan. To fund this obligation, the FHA charges borrowers a fee. Home buyers who use FHA loans pay an upfront mortgage insurance premium (MIP). They also pay a modest ongoing fee with each monthly payment. If a borrower defaults on an FHA loan, the FHA uses collected insurance premiums to pay off the mortgage.
FHA Loan Program
First Time Home Buyer
3.5% Down Payment
$100 down for qualified HUD Repo properties