FHA loans, without a doubt, comprise one of the most widely used programs available. Because of their lower down payment and lower lending requirements, FHA loans are very popular with first-time homebuyers. Perhaps that’s why the FHA program is also one of the most misunderstood—many buyers think that FHA loans are only available to first-time homebuyers, but they are also a viable option for repeat buyers.
Three facts about FHA mortgage loans
- The FHA is not a loan. The Federal Housing Administration (FHA) provides mortgage insurance to lenders that make loans that meet FHA standards. The FHA reimburses lenders a portion of the losses if there’s a default on the loan.
- FHA loans are available to first-time homebuyers and repeat buyers. The confusion arises from the fact that there are indeed additional incentives associated with first-time homebuyers—for example, reduced mortgage insurance premiums.
- All FHA loans are not the same—lenders who offer limited programs with limited rates likely cause this misconception. FHA loans and rates vary greatly from one lender to the next.
If you would like to learn more about FHA mortgage loans, or if you are interested in financing a home in Miami or the South Florida area, please fill the form below.
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