The FHA loan is like any other loans, there are different options out there so that they can appeal to many different buyers. When many people think of this type of loan they think of one product and while all of these loans are insured by the Federal Housing Administration, there are some differences in the interest rates as well as in who may qualify for them. The different FHA programs ensure that just about anyone get buy a home today. FHA Loan Options The most common type of FHA loan is the fixed rate mortgage, also known as section 203 (b). These loans have the same interest rate and it does not change during the term of the loan. This type of loan insures the lender for the total amount of the mortgage in the case that the buyer defaults and requires a smaller down payment on the loan than a conventional mortgage would typically require. When you get a fixed rate loan of this type you can anticipate having to put down about three percent of the total amount that is being borrowed. Many borrowers like the fixed rate option because it offers them the same interest rate, and therefore the same monthly payment, for the entire term of the loan. With the fixed rate option you can choose between 10, 15, 20, or 30 year terms. For those that don't find the fixed rate FHA loan option appealing they may want to look into the adjustable rate mortgages, also known as Section 215. The adjustable rate mortgages or ARM's are a great deal for those that are looking for a very low interest rate in the beginning. If you are only going to live in the home for a few years this can be a great option because you can take advantage of very low interest rates, which will keep your monthly payment lower than it would be if you had purchased the same house at a fixed interest rate. The Federal Housing Administration also has a couple of great programs such as the Teacher Next Door and Officer Next Door FHA loan programs. These programs are extended to teachers in the United States as well as police officers. If the home is financed with an FHA loan the teacher or officer is only required to put a $100 down payment on the home and they receive a 50% discount. The program is part of the Housing and Urban Development program and it can help teachers and police officers in many areas of the country to buy a home for the first time, especially because it is known that teachers and law enforcement offers are not all that well paid based on what they do for a living. Not all homes will qualify for this program, only homes that have been acquired by HUD will qualify, but there are some really great houses out there that teachers and police offers can purchase for very little and with very little out of pocket at move in. As you can see, there are different loan options offered by the FHA so that just about anyone can get into a home and experience the pride of home ownership. If you have always believed that you could not buy a home you may want to look into one of these loan programs. There are many mortgage brokers out there that would love to help you buy a home.
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