A FHA Loan is a home loan that is insured by the Federal Housing Administration. FHA loans are issued by mortgage lenders but they are backed by FHA.  This means that FHA gives confidence to the mortgage lender that in the case of a default or foreclosure, FHA has insured the loan. 

Since FHA insures this loan, an FHA loan requires a smaller down payment, as low as 3.5% and a lower credit score for the borrowers. This makes FHA loans a common choice for first time homebuyers. 

FHA loans have maturities of 15 years or 30 years and have a fixed rate of interest for the duration of the loan.  

Since FHA has more flexible underwriting requirements, there is an insurance premium for borrowers with FHA loans.  This premium is added upfront to the loan and there is a monthly insurance premium as well.  This means that an FHA loan with the same interest rate and term as a conventional loan will have a higher monthly payment.  

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.  (714) 696-6773