FHA New & Improved


1. About The FHA- Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development’s (HUD) Office of Housing in 1965.

When the FHA was created, the housing industry was flat on its back:

Two million construction workers had lost their jobs.

Terms were difficult to meet for homebuyers seeking mortgages.

Mortgage loan terms were limited to 50 percent of the property’s market value, with a repayment schedule spread over three to five years and ending with a balloon payment.

America was primarily a nation of renters. Only four in 10 households owned homes.

During the 1940s, FHA programs helped finance military housing and homes for returning veterans and their families after the war.

In the 1950s, 1960s and 1970s, the FHA helped to spark the production of millions of units of privately owned apartments for elderly, handicapped and lower income Americans. When soaring inflation and energy costs threatened the survival of thousands of private apartment buildings in the 1970s, FHA’s emergency financing kept cash-strapped properties afloat.

The FHA moved in to steady falling home prices and made it possible for potential homebuyers to get the financing they needed when recession prompted private mortgage insurers to pull out of oil producing states in the 1980s.

By 2001, the nation’s homeownership rate had soared to an all time high of 68.1 percent as of the third quarter that year.

2. Why FHA- In the past, FHA loans have been perceived as “Difficult” loans to qualify for. There were qualification issues because of credit, appraisal, and lots of little things that needed to be perfect in order to qualify. Surprise! With new and improved relaxed guidelines, FHA is easier then ever to qualify for. People suffering from Sub prime adjustable rate loans that don’t qualify conventionally, are finding FHA is coming to the rescue in more and more cases across the nation. FHA has made it there mission to stabilize the mortgage market crisis, and now is a better time then ever for you to take advantage of an FHA Loan!

3. Getting Approved for An FHA Loan- To pre-qualify for an FHA loan, you should be able to demonstrate employability, job stability and reliability. To the FHA, reliability includes holding a steady job for at least two years with the same company or employer and increasing or at least maintaining consistent income. The FHA would like to see that any foreclosures or bankruptcies on your record are at least three years old. The FHA loan bottom line: demonstrate that you have been a good credit risk for two years or more and you will have a much better chance at being approved for an FHA loan. However, there are many other factors to getting approved for an FHA loan other than just credit. The best way to find out if you qualify is to make application with one of our FHA loan experts today!

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