The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), offers a federal guarantee for mortgages that meet specific requirements. Lending rates for these FHA loans are lower when compared to loans without a federal guarantee.


Easy Qualify, Low Down Payment, and Closing Costs

An FHA guaranteed loan is easy to qualify for, may have a lower down payment, and usually has lower closing costs than a convention loan without the FHA guarantee.


Programs for First-Time Home Buyers

The FHA has special programs for first-time home buyers with down payments as low as 3.5% of the total price. These FHA loans for first-time buyers are available for single family homes and properties that have up to four units.


Reverse Mortgages for Seniors

The FHA offers help to seniors, who are older than 62, and either own their home outright or have a low mortgage balance. For these seniors, there is the FHA Reverse Mortgage Program that allows seniors to get a cash loan based on the equity value of their own.


Energy-Efficient Homes

The FHA supports efforts to make homes more energy efficient by offering the FHA Energy-Efficient Mortgage that allows the inclusion of the cost for making energy-efficiency upgrades in the loan that is used to purchase the home.


Mobile and Manufactured Homes

FHA loans are available for mobile homes and manufactured homes. There are loans for mobile homes kept in trailer parks. There are also FHA loans for these homes that are placed on land that is purchased along with the home.

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Down Payment Assistance

Down payment assistance may be available for qualified homebuyers through state, local, and various county programs. In Philadelphia and the surrounding area, the state resource is the Pennsylvania Housing Finance Agency and the local resource is the Division of Housing and Community Development in Philadelphia.
Depending on where a home is located, county support may be available from the Community Development programs in Bucks, Chester, Delaware, Montgomery, and Philadelphia counties.

Special Lending Programs

HUD offer special programs for those that qualify, such as:


The Good Neighbor Next Door

The Good Neighbor Next Door: These are loans for firefighters, teachers, and police officers.

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Public Housing Home Loan:

Public Housing Home Loan: Loan to buy homes for those living in rented public housing.


Indian Home Loan Guarantee Program:

Indian Home Loan Guarantee Program: Home loans for Native American people.

Frequently Asked Questions about FHA Loans

A down payment of 3.5% may be all that is needed for FHA mortgage financing.

Borrowers with a FICO credit score as low as 500 may be able to qualify for a FHA loan.

FHA loans require mortgage insurance to protect the lender in the case of a default. This makes them more expensive when compared to a conventional loan with a 20% down payment that does not require mortgage insurance coverage. For those that can make a 20% down payment or larger, a conventional loan may be a better choice with lower costs and fewer provisions.

To meet occupancy rules a person must live in a house that has a FHA mortgage for at least one year after the home purchase. After that, the home may be rented to others without disturbing the FHA loan.

There are no minimum or maximum income amounts for FHA loans.

We work with our clients to help them benefit from all of the FHA programs available and get any extra assistance they may qualify for, in order to help them buy a home.

Understanding all of these government programs is a complex undertaking. Working with the O’Kavage Group makes it easier to navigate all the rules of these programs in order to make sure that the documentation is done correctly to get the best loan terms that are available.