FHA loans are designed to help those who may not otherwise qualify for a traditional bank loan due to their income level or credit history. FHA loans have a low down payment requirement and closing costs can be lower than those of other loan types. The FHA also offers some unique options, such as a reverse mortgage loan and an adjustable rate mortgage.
In 2018, the FHA has a variety of new loan options available. These loan options include:
1. Cash-out refinancing: This option allows borrowers to refinance their current mortgage and receive cash in hand to pay off other debts, make home improvements, or use for any other purpose. Borrowers need to have sufficient equity in their home to qualify.
2. Streamline refinance: This type of loan is designed to help borrowers with an existing FHA loan lower their monthly payment and/or interest rate. It is typically easier to qualify for than a traditional loan and does not require an appraisal of the home.
3. 203(k) loan program: This loan is designed for borrowers who want to finance a fixer-upper. The loan allows borrowers to borrow additional funds that can be used to make repairs and renovations on their home.
4. Home Equity Conversion Mortgage: This loan is designed for seniors who are over the age of 62. It is a reverse mortgage loan that can allow seniors to access the equity in their home without having to make monthly payments.
5. Title I Property Improvement Loan: This loan is designed to help borrowers make home improvements. Borrowers can use the money to make additions, repair damages, or update their home.
6. Adjustable Rate Mortgage: This loan is designed for borrowers who want a lower fixed rate payment but also want the flexibility of an adjustable rate mortgage. The interest rate on this loan can change depending on the market conditions.
7. HomeReady loan: This loan is designed for low- and moderate-income borrowers. It requires no down payment and has a low interest rate.
Overall, the FHA offers several loan options that are designed to meet the needs of different borrowers. Borrowers should research and compare different loan options to find the best fit for them. FHA loans can be a great way for borrowers to get into a home without having to put 20% down and without having perfect credit.
This article was contributed on Oct 29, 2023