A Day In The Life Of A Real Estate Agent: The Morrow Report: FHA New Policy

The Federal Housing Administration was begun as part of the New Deal in 1934. It guarantees private home mortgages (FHA loans) and provides funds to promote housing ownership. The new policy lowers the cost of the FHA’s mortgage insurance premiums by 50 basis points. This action will make homeownership more affordable for over two million Americans.

FHA loans typically offer options for first-time home buyers, senior citizens and home improvements. One of the most difficult elements of the home buying process is saving up enough money for a down payment. If you are a first-time home buyer, an FHA loan may allow you to make a down payment of only 3 percent. You may also be able to roll your closing costs and other fees into the loan amount.

The lower prices will enable more qualified borrowers to enter the market.

The FHA is not lowering its underwriting standards or luring irresponsible borrowers into homeownership. Rather, it is enabling qualified buyers to safely enter the market without exposing taxpayers to unnecessary risks. If you don’t pre-qualify right away you can improve your profile so you may become eligible in the future.