Loan Blogger

Housing Loan

Home.. sweet home. It is always remain a dream for every person. To see this dream come in reality, we need structured finance assistance. FHA loan in the United States is such a solution for that. The Federal Housing Administration (FHA) is a United States government agency created as part of the National Housing Act of 1934.

The goals of this organization are as follows: to improve housing standards and conditions, to provide an adequate home financing system through insurance of mortgage loans and to stabilize the mortgage market. FHA loans have allowed lower income Americans to borrow money to  purchase a home that would not be possible for them to afford.. The program originated during the Great Depression of the 1930s. Over time, private mortgage insurance companies came into play, and now FHA primarily serves people who cannot afford a conventional down payment or otherwise do not qualify for insurance. The Federal Housing Administration offers various types of housing loans. These includes: Adjustable Rate Mortgages, Fixed Rate Mortgage loans, Energy Efficient Mortgages, Graduated Payment Mortgages, Mortgages for Condominium Units, Growing Equity Mortgages .

In order to qualify for an FHA housing loan, applicants must meet certain criteria, including employment, credit ratings and income levels. The specific requirements are:

Steady employment history, at least two years with the same employer, consistent or increasing income over the past two years, credit report should be in good standing with less than two thirty day late payments in the past two years, any bankruptcy on record must be at least two years old with good credit for the two consecutive years. Any foreclosure must be at least three years old and mortgage payment qualified for must be approximately thirty percent of your total monthly gross income. FHA does not make loans. Rather, it insures loans made by private lenders. It also helps to down payment assistance for affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership.

The creation of the Federal Housing Authority successfully increased the size of the housing market. By convincing banks to lend again, as well as changing and standardizing mortgage instruments and procedures, home ownership has increased from 40% in the 1930s to nearly 70% today.