If you're in the market for a new home or want to refinance your existing mortgage, you may want to consider a loan insured by the Federal Housing Association (FHA). An FHA loan attracts home buyers with low incomes and those needing low down payments who may not qualify for conventional mortgages. It also appeals to lenders because of the protection it offers - and while the FHA doesn't actually give the loans, they insure them. So if homeowners default on the loans, the lender is protected from the loss by the FHA insurance. However, in order to get FHA insurance on a home loan, the lender must follow the FHA loan requirements in approving and setting up the loan. And borrowers who understand the FHA requirements early on in their house hunt will be better prepared to get financing once they find their dream home or are ready to refinance their mortgage.
Here's the rundown of FHA loan requirements.
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