About the Federal Housing Administration

What is the Federal Housing Administration?

The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family, multifamily, manufactured homes and hospitals. It is the largest insurer of mortgages in the world; insuring over 34 million properties since its inception in 1934.

What is FHA Mortgage Insurance?

FHA mortgage insurance protects lenders against loss if the homeowner defaults on their mortgage loan. The lenders bear less risk because FHA will pay the lender if a homeowner defaults on their loan. Loans must meet certain requirements established by FHA to qualify for insurance.

Why does FHA Mortgage Insurance exist?

Unlike conventional loans, FHA-insured loans require small down payments. There is more flexibility in an FHA loan than conventional loans in calculating household income and payment ratios. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment. In most cases, the insurance cost will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property-whichever is longer.

How is FHA funded?

FHA operates entirely from self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.

History of the Federal Housing Administration

Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965.

When the FHA was created, the housing industry was flat on its back:

  • Two million construction workers had lost their jobs.
  • Terms were difficult to meet for homebuyers seeking mortgages.
  • Mortgage loan terms were limited to 50 percent of the property's market value, with a repayment schedule spread over three to five years and ending with a balloon payment.
  • America was primarily a nation of renters. Only four in 10 households owned homes.

During the 1940s, FHA programs helped finance military housing and homes for returning veterans and their families after the war.

In the 1950s, 1960s and 1970s, the FHA helped to spark the production of millions of units of privately-owned apartments for elderly, handicapped and lower income Americans. When soaring inflation and energy costs threatened the survival of thousands of private apartment buildings in the 1970s, FHA's emergency financing kept cash-strapped properties afloat.

The FHA moved in to steady falling home prices and made it possible for potential homebuyers to get the financing they needed when recession prompted private mortgage insurers to pull out of oil producing states in the 1980s.

By 2001, the nation's homeownership rate had soared to an all time high of 68.1 percent.

The FHA has insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.

In the more than 60 years since the FHA was created, much has changed and Americans are now arguably the best housed people in the world. FHA has helped greatly with that success.

You must have javascript enabled.

Quick Contact Form

Refinancing:  
Name:
Email:
Telephone:
Comments:
 

CLICK HERE TO APPLY NOW!

For Future Reference

BOOKMARK THIS SITE NOW

Get Started - Apply Today

FHA Application - Apply For FHA
Frequently Asked Questions
FHA Guidelines
FHA Requirements

FHA Refinance Programs

FHA Streamline
FHA Secure
FHA Loan Refinance

FHA Loan Programs

Federal Housing Administration
FHA Down Payment
203k FHA Loan
FHA Fixed Rate
FHA Adjustable Rate

FHA Loan Calculators

Mortgage Payment Calculator
Mortgage Principle Calculator
Mortgage Length Calculator
Mortgage Affordability Calculator
All Mortgage & Refi Calculators

Contact FHA Loan Corp

Apply Today
Contact Us

Testimonials

FHALoanCorp
Phoenicia Center
7932 W. Sand Lake Road
Suite 106
Orlando, FL 32819
Email: info@fhaloancorp.com
Copyright © 2004-2010 - FHALoanCorp | Privacy Policy

Helpful Articles & Info

Federal Housing Administration
FHA Loan Information
10 Things To Know About FHA Loans
FHASecure Saves 33,000 Homes
FHA Loan Benefits & Information
Why Ask For An FHA Loan?
What Does The FHA Do?
Fixed Rate Loan Information
Refinancing Home Loans
FHA Loans Are In High Demand
Avoid Foreclosure With FHASecure
Subprimes In Favor of FHA
FHA Mortgage Insurance
FHA Adjustable Rate Mortgage
FHA Insurance Funds
FHA Mortgage Refinance Options
FHA Loan Checklist
What is FHA Refinancing?