• The Federal Housing Administration is a U.S. government agency that helps secure mortgage loans for approved lenders by paying off the loan in the event that the borrower defaults and does not repay. The FHA objective is not to give loans to people, but to help insure the loans they have. The FHA website answers many of the questions people have regarding the FHA mortgage program.
  
  

What is an FHA Mortgage?

• An FHA mortgage is not a mortgage loan to buy a new home. When you want to buy a house, you can apply for a mortgage loan. An unsecured mortgage loan is a type of loan that does not give the lender any security in the event that you, for any reason, do not pay your loan back. The FHA provides a solution for this problem by providing insurance to those mortgage loans from approved lenders and helping them in case you do not pay your loan back. The FHA mortgage program also helps you to get the amount of loan money you qualify for.
  
  

Who is Eligible?

• The FHA does not provide loans, but it does help you to get a loan more easily. To receive this help and qualify for an FHA mortgage loan, you need to meet the same requirements necessary to getting a normal loan: you must have a good credit score, proof of income and job stability. U.S. citizenship is not required for an FHA mortgage, but you must have a Social Security card. Also, your mortgage loan must be for your primary residence -- a home where you live for the majority of the year.
  
  

What are the Advantages of an FHA Mortgage?

• You can find many advantages in an FHA mortgage. If you apply for an FHA mortgage and you are approved, you usually need to pay only 3 percent of your home's cost as a down payment, and it does not need to technically be your money. For example, it could be your parents' money. With an FHA mortgage, requirements are less strict than they are with a normal mortgage loan. If you have filed for bankruptcy previously, it does not necessarily disqualify you from approval if you complete all the processes for the FHA mortgage during the required time period.
  
  

What Costs Will I Incur With an FHA Mortgage loan?

• If you are approved for an FHA mortgage loan, there are still some expenses you will need to incur to purchase your house. These expenses include a down payment that is usually no more than 3 percent, the appraisal fee, an escrow fee, a mortgage origination fee (typically 1 percent of the base mortgage amount), recording fees, credit report charges, title insurance policy fees, MMI impounds, hazard insurance and reserves, mortgage insurance, which can be financed, and property taxes.