An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan which is provided by an FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford.
To obtain mortgage insurance from the Federal Housing Administration, an upfront mortgage insurance premium (UFMIP) equal to 1.75 percent of the base loan amount at closing is required, and is normally financed into the total loan amount by the lender and paid to FHA on the borrower’s behalf. There is also a monthly mortgage insurance premium (MIP) which varies based on the amortization term and loan-to-value ratio. FHA loan guidelines are currently as follows:
MAXIMUM LOAN AMOUNT
$294,515 (varies per county)
MINIMUM DOWN PAYMENT
15 OR 30 YEARS
31% HOUSING / 43% TOTAL DEBT
UP TO 6% OF SALES PRICE
*Information as of 10/3/2018. All of the above information is subject to change or may have additional requirements.