What is A FHA Loan?


An FHA Loan is a mortgage insured by the Federal Housing Administration, with issuance carried out by mortgage lenders but the backing provided by the FHA. This assurance from the FHA instills confidence in mortgage lenders, as it signifies that in the event of default or foreclosure, the loan is insured by the FHA.

Due to FHA insurance, these loans typically require a smaller down payment, often as low as 3.5%, and are more lenient regarding the credit scores of borrowers. Consequently, FHA loans are frequently chosen by first-time homebuyers.

FHA loans offer maturities of 15 or 30 years, featuring a fixed interest rate for the entire loan duration. However, owing to the FHA’s more flexible underwriting requirements, borrowers with FHA loans are subject to an insurance premium. This premium is upfront and added to the loan, with an additional monthly insurance premium. As a result, an FHA loan with the same interest rate and term as a conventional loan will incur a higher monthly payment due to these insurance considerations.

FHA loans have maximum loan amounts depending on the county where the property is located. To see the maximum loan amount allowed in your county, please visit our California FHA Loan Limits page: Click Here for FHA Loan Limits

If you want to learn more about whether a FHA loan is a good choice for you, call us to confidentiality review your information and your home loan goals. 


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