If you’re out and about looking for a home in the Indianapolis real estate market and you’ve applied for a mortgage, you may have noticed that there are fewer financing options available then there were just a few years ago. All of the issues surrounding the subprime loans controversy are to at least partially thank for that. Fear not though because there are still sources available to fund your Indianapolis dream home. FHA-insured loans are just one of those options.
FHA is the acronym for the Federal Housing Administration. They provide mortage insurance for loans given out through lenders approved by FHA. Founded in 1934, FHA insures the most mortgages worldwide, including multifamily and single family homes. These include manufactured homes as well.
Funded by income that is self-generated, this service comes at no cost to taxpayers. The program is operated from the mortgage insurance proceeds. FHA is also interested in furthering community development and the eventual stimulation of the economy through providing resources for homeownership.
The advantage of FHA loans over a conventional loans is having to bring less money to when closing on your home. There is also greater leniancy in figuring payment and income ratios. And you don’t have to be concerned about paying this insurance for the life of your FHA loan as in most situations, this part of your payment will cease after the outstanding remainder of the loan is 78 percent of property value or after five years, whichever is longest.
Today, FHA is a section of HUD, the Department of Housing and Urban Development. FHA has been around for decades of housing upheavals to help Indiana residents and other Americans get back on their housing feet. Today, FHA loans are very popular when looking for Indianapolis homes for sale, but FHA has offered many different services over its long history.