| If you do not have the funds to pay at least a three | | | | Highlights |
| percent down payment requirement to secure a | | | | Since FHA mortgages are targeted towards the low- |
| mortgage and have poor credit, then an FHA | | | | to moderate-income population, standards for |
| mortgage may be just what you need. There are | | | | qualification are less stringent and allow you to obtain a |
| numerous lending companies in Florida that offer FHA | | | | mortgage even with bad credit. The down payment |
| loan mortgages. | | | | requirement could go as low as one percent when |
| What is an FHA loan? | | | | conventional loans usually require 26 to 28 percent and |
| The FHA or Federal Housing Administration started out | | | | 33 to 36 percent to qualify for a mortgage. Typically, |
| in the 1930s during the depression when lenders | | | | payments will not exceed 29 percent of the monthly |
| stopped making loans because a large number of the | | | | gross income and total debt should not be more than |
| loans they had were in default. From then on, the FHA | | | | 41 percent of gross income. |
| has evolved into a support agency for helping the low | | | | Terms |
| to moderate income population to become | | | | FHA mortgages are usually on a fixed-rate mortgage |
| homeowners who do not have the adequate financial | | | | with terms of up to thirty years. Interest rates and |
| resources and a good credit rating to secure a loan. It | | | | points are more or less the same as conventional |
| is governed by the Department of Housing and Urban | | | | mortgages. With FHA mortgages, there is a mortgage |
| Development or HUD and is insured by the United | | | | insurance premium to be paid to the HUD every |
| States government, but is not issued by them. The | | | | month. In a thirty-year period, 1.5 percent of loan is paid |
| HUD requires the borrower to pay a mortgage | | | | upfront for the insurance and 0.5 percent of the |
| insurance every month and guarantees the lender of | | | | remaining balance is paid every month. |
| full payment in case of default. | | | | |