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Federal Housing Administration (FHA)

Single Family Housing Programs

One to Four Family Home Mortgage Insurance (Section 203(b))

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

Nature of Program: Homebuyers may obtain FHA-insured mortgages from HUD-approved lenders to purchase homes (including condominium units) 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 a portion 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 $271,050 in all areas, with higher limits in areas with higher median house prices up to a maximum of $729,750 for one-unit homes through December 31, 2013. 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 annual 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)). Condominium units were authorized for FHA insurance by the Housing and Economic Recovery Act of 2008 (HERA) (Public Law 110-289). 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
To locate a HUD-approved lender on the Web

Current Status: Active.