FHA Home Mortgage Insurance

Federal mortgage insurance to finance homeownership and the construction and financing of housing.

Homebuyers may obtain FHA mortgages from HUD-approved lenders to purchase houses with low downpayments. By insuring commercial lenders against loss, HUD encourages them to invest capital in the home mortgage market. HUD insures loans made by private financial institutions for up to 97 percent of the sales price with terms for up to 30 years. The loan may finance homes in both urban and rural areas. The maximum mortgage amounts are at least $200,160 in all areas, with higher limits in areas with higher median house prices up to a maximum of $362,790 for one-unit homes during 2006. Higher limits also exist for two- to four-family properties. The loan limits change annually, based on home price estimates. The limits are benchmarked to the loan limits of the Government-Sponsored Enterprises, Fannie Mae and Freddie Mac. The mortgagee collects from the borrower an up-front mortgage insurance premium payment, which may be financed, at the time of loan closing, as well as monthly premiums that are not financed, but included in the regular mortgage payment.
Applicant Eligibility:Any person able to meet the cash investment, mortgage payment, and credit requirements. The program is generally limited to owner-occupants.
Legal Authority: Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)). Regulations are at 24 CFR part 203, subpart A.
Administering Office: Assistant Secretary for Housing-Federal Housing Commissioner,
U.S. Department of Housing and Urban Development, Washington, DC 20410-8000.
Information Sources: Administering office and HUD field offices.
On the Web: www.hud.gov/offices/hsg/sfh/ins/203b--df.cfm
To locate a HUD-approved lender on the Web: www.hud.gov/ll/code/llslcrit.html
Current Status: Active.