Common situations that qualify for FHA loans include:
First-time homebuyers – FHA loans can be a more affordable option for first-time homebuyers with low income, poor credit, or minimal credit history. Because they are backed by the Federal Government, banks are more likely to issue these loans to higher-risk borrowers. As a result, borrowers may pay higher interest rates and PMI compared to other types of loans. If you are a first time homebuyer, take this quiz to see if you qualify for additional loan assistance.
Seniors – Borrowers who are 62 years of age or older and own their homes outright or have low loan balances can qualify for the FHA’s reverse mortgage program, the Home Equity Conversion Mortgage (HECM). The HECM can help seniors on a fixed income convert a portion of their home’s equity into cash to assist with cost of living and other expenses while retaining their home’s title. Funds can be distributed as a fixed monthly amount, a line of credit, or a combination of both.
Home Improvement – FHA loans can be issued to homeowners that wish to make energy-saving improvements to their homes. Such renovations could include installing new energy-efficient appliances, more efficient windows, insulation and more.
For borrowers purchasing a fixer-upper, the FHA’s 203(k) Improvement Loan is a viable option. This loan accounts for the cost of certain repairs and improvements as part of the total amount borrowed.
Mobile Home Residents – the FHA has two loan products intended for mobile home/factory-built homeowners: one for those who own the land that the home is on and another for mobile homes located in mobile home parks.