Some facts you should know about FHA loans are:

• FHA loans are basically mortgage insurance that is offered by the FHA so that lenders have a guarantee that you will not default on your loan. This helps people who may not have been able to qualify for a loan on their own get financing to purchase a house because the mortgage is guaranteed to the lender.
   
• Even if you have had a bankruptcy or foreclosure in the past the FHA may be able to help you get financed for a loan.
   
• The FHA loan program was designed to help people like newly married couples, adults who are still working on their education, and others who are trying to build a better future and want to own their own home but need a little help.
   
• There is no minimum income required to get an FHA loan. What they look at is debt to income ratio which means they take your monthly debt and monthly income and figure out what size mortgage payment you can afford. Then from this amount they determine what price range of a home you can afford.
   
• You can finance your closing costs so that you have no out of pocket expenses at the time you purchase your home.
   
• Your down payment can come from a relative or an organization or non-profit agency. The FHA allows you to get your down payment for free from a family member or organizations like Ameridream.
   
• As the homeowner you are responsible for the costs of the appraisal, the title search, and any mortgage insurance premiums which are usually financed directly into your monthly mortgage payment.
   
• The mortgage insurance will cost 0.5% of the total value of the loan and can be dropped once the loan has reached 78%.
   
• The FHA only makes loans to owner occupants. This means that you can not purchase a rental property with an FHA loan that you do not intend to live in. You can purchase up to a four unit building and occupy one of the units yourself.
   
• The FHA created this program to help low to moderate income people and families become homeowners without being forced to wait the many years it would take to try and save a down payment and get approved for a mortgage loan.
   
• The FHA has limits on what the mortgage company can charge for their fees. Since the program is designed to help low and moderate income people the FHA will not allow predatory lending and the mortgage lender can not charge more that 1% of the total loan as a loan origination fee.
   
• FHA Refinances are starting to grow in popularity as many sub-prime loans have been going into default or nearing default. An FHA refinance is one way to prevent foreclosure for some families.
   
• The FHA has mortgage lending limits in place to avoid the buyers getting in over their heads. You can find out what the maximum price the FHA will offer loans to purchase homes in your area is by going to FHA experts and putting in the state and county information on where you intend to purchase a home.
   
• Right now a 30 year fixed FHA loan is 6.491% APR with 2 points. A 15 year fixed FHA loan is 6.241% APR with 1.375 points right now. So you can see how FHA loans are more affordable that conventional loans because the interest rates stay low since the loan is guaranteed by the FHA and the lender can not try and lock you into a high interest rate just because of bad credit or a low down payment.
  
  The FHA loan program offer a good opportunity for individuals and families to own their own homes without waiting and worrying about credit issues. For more information on FHA loans go to USC Credit Union