- An FHA loan is a mortgage insured by the Federal Housing Administration.
- Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan.
- FHA borrowers can use their own savings to make the down payment. But other allowed sources of cash include a gift from a family member or a grant from a state or local government down payment assistance program.
- The maximum loan amount available on a specific property is based on the purchase price or the FHA-appraised value, whichever is less.
- The borrower must provide 3percent of sales price to be used toward down payment & closing cost; the seller is allowed to contribute up to 6percent of sales price towards discount points, prepaids and other allowable closing cost.
FIVE FRIDAY FHA FACTS
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