You have probably heard about an FHA loan, but do you know all the benefits and requirements about getting an FHA home loan? Probably not and in this video, we are going to share three things you may not know about FHA.

In this video we will share information about FHA, beginning with number one.

Fact 1: The FHA Is Not A Mortgage Lender

Many people do not realize that FHA is not actually a mortgage lender. In fact, FHA stands for Federal Housing Administration, a government agency within the U.S. Department of Housing and Urban Development (HUD).

The FHA doesn’t make mortgage loans to home buyers. Instead, the FHA provides mortgage insurance to banks, credit unions, and other lenders who provide home loans meeting the FHA requirements.

The FHA acts as an insurance company who reimburses lenders for part of their losses if a borrower goes into foreclosure because they don’t make the payments.

This FHA insurance policy from FHA helps lenders extend credit even when you have a lower credit score and a smaller down payment.

Let’s look at fact number two.

Fact 2: FHA Loans Aren’t Just For First–Time Home Buyers

Again, many people think that FHA loans are only for first-time home buyers, when in fact, both first time and repeat buyers can finance houses with FHA mortgages.

The FHA loan is often thought of as a product for “first–time buyers” because of its low-down payment requirements.

But not all repeat homebuyers have excellent credit or lots of money saved for a down payment on a home. The FHA home loan program is open to them, too.

You must live in the property though to get an FHA loan. It’s not for second homes or investment properties.

The FHA will insure mortgages for any primary residence. There is no requirement that you must be a first–time buyer to use the FHA loan program.

Let’s move on to fact number three.

Fact 3: FHA Loans Don’t Have Income Or Geographic Limits

Other low–down–payment mortgage programs have eligibility requirements. Many are limited to those with low, very low, or moderate income or are only available to certain groups.

The VA loan, for example, allows 100% financing. But you must be an eligible military borrower to use it.

The USDA Rural Development loan also allows 100% financing, but the program requires you to buy in a designated rural area and imposes income limits, too.

By comparison, anyone can apply for an FHA loan. They aren’t just for certain groups, income levels, or ZIP codes.

For most buyers, FHA mortgages require a 3.5% down payment. This makes the FHA mortgage one of the most lenient mortgage types available nationwide.

Your down payment money could be a gift from a family member, employer, charitable organization, or government homebuyer program.

So, if you’d like more information about the FHA home loan program, check with your lender. They can definitely provide you with answers and help you complete an application to see if you qualify.