FHA Mortgage Loans – Arizona
The Lowdown on Federal Housing Administration and Its Financial Programs
The Federal Housing Administration (FHA) was established when the National Housing Act of 1934 was effected. Its corporate goal is to help more Americans to purchase new homes. This is achieved by offering reasonably priced units on the market as well as giving home owners the options of affordable down payments and adjustable credit stipulations. It also aims to up the number of home construction, boost employment rate as well as insure government financial loans.
Since its inception, the FHA has insured a multitude of home mortgages, observing a market share of 30% the year before. This was an exponential increase compared to the 3% in 2007. Insuring almost two million loans, FHA’s initiatives have benefitted 750,000 property buyers in 2009.
The FHA financial products were rolled out circa the 1930s, and were meant to aid those affected by the economic recession. There was a spike in foreclosure rates and defaults, and the FHA programs were a form of assurance for the banks and lenders, giving them the confidence to continue making loan transactions. Thanks to the programs, many blue-collared Americans could still have the option to borrow capital money to pay for their home deposits.
The government also offered subsidies to back the loans, albeit the ultimate goal was to make the programs run on their own with the premiums borne by the applicants. Contrary to popular belief, the FHA does not deal with any monetary transactions; it merely acts as an insurer to support the loan options offered by financial institutions.
Under the FHA, there are four Single Family Housing programs that should be of interest to home buyers in Arizona. They are: Section 203(b), Section 234(c), Section 203(k) and Home Equity Conversion Mortgages (HECM) – Reverse Mortgages.
FHA Loan Type Highlights:
FHA Loan Limits in Arizona by county
FHA Housing Schemes At A Glance:
Section 203(b)
- Most Arizona FHA loans fall under the 203b section.
- Can be used to finance the one to four housing units
- Terms that can be adjusted to accommodate the needs of the applicant
- Low down payment: only 3.5% required
- Various gift options for down payment
Section 234(c)
- The FHA product used to insurance condominiums
- Credit conditions as per 203(b) are applicable
- New stipulations rolled out in 2010: applications for condominium units must be submitted via HRAP/DELRAP. Arizona approved condos can be searched from this lookup site
- The 203k program allow the borrower to finance the cost to repair/remodel their home
- Spurs community and neighborhood revitalization through repair and maintenance
- One mortgage loan will be used for the acquirement and upgrade of units
- Up to four housing units are eligible; consult your preferred banks on the criteria
- Mandatory improvements include cost effective energy conservation standards and smoke detectors
- FHA Consultants may be required on certain 203k loans
HECM – Reverse Mortgages
- FHA was the first association to push for an introduction of reverse mortgages
- Provides applicants with access to equity in their housing units
- Payment methods: lump sum, installments, line of credit or a mix of the options
- Only applicants of age 62 and/or above can qualify
In addition to the above list of initiatives, FHA has a string of other mortgage loans as well. For limited repairs, applicants can look at their Streamline Refinance and Streamline 203(k). A newly passed bill has also enabled FHA to provide unique programs —such as the ‘Make Home Affordable Program’— to institutions and lenders to alter and refinance current mortgages.
When sifting through options for a Arizona home loan , be sure to consider FHA and their offering. Boasting better loan stipulations, comparatively higher loan limits, repayment terms that span three decades as well as adjustable down payment options, FHA will stay true to its mission and help regulate the mortgage industry. Most importantly, their programs will help Americans keep a roof over their head and possess liquid assets.
Common Questions about FHA:
What is the criterion for the credit score?
In the state of Arizona, most financial institutions and money lenders will need your credit score to be 620.
Could you let me know the maximum amount of financial loan I can apply for?
Present an Arizona mortgage broker or professional with all the necessary documents and he will be able to analyze your current financial status and maximum loan amount.
How do I check if the housing unit I’m looking to purchase allows me to apply for FHA loans?
Follow this link to check if your property is eligible —you will need your property’s zip code.
