• FHA mortgages through HUD can help homeowners.house image by kruszek from Fotolia.com
  
  If you're thinking about buying a home but are having trouble obtaining a mortgage, check with the U.S. Department of Housing and Urban Development (HUD). HUD has a number of mortgage assistance programs to help eligible citizens obtain a mortgage. Check with HUD to see if you qualify for one of its mortgage assistance programs.
  
  

FHA 203(k) Mortgages

• The Federal Housing Administration (FHA) offers 203(k) mortgages for borrowers who wish to buy homes that need repairs. Banks will not give a mortgage until needed repairs to a home have been made. But sometimes potential buyers can't afford to make a down payment and the necessary repairs. Borrowers of the 203(k) mortgage must make a down payment of at least 3.5 percent. The mortgage will cover the costs of both acquisition and repairs. An FHA-approved lender must appraise the property and approve the loan. The lender will set up an escrow account to pay for the repairs. The contractor who makes the repairs will draw the money from the escrow account as the renovations progress, and will receive the final 10 percent of the repair budget when repairs are complete.
  
  

FHA 203(b) Mortgage

• The FHA offers 203(b) Mortgage Insurance to first-time homeowners. This mortgage insurance can cover up to 96.5 percent of the home's purchase price as well as most closing fees and costs. The borrower will obtain the mortgage from an FHA-approved lender. HUD insures the mortgage, which the borrower can apply toward the purchase of a one- to four-unit structure. Borrowers should contact an FHA lender to review eligibility requirements. Mortgage limits vary depending on location, so borrowers should review the FHA's mortgage insurance limits for their area.
  
  

• Homeowners 62 years of age or older who have a HUD-approved condominium, a manufactured home, single-family home or a one- to four-unit home can apply for a Home Equity Conversion Mortgage (HECM) reverse mortgage through the FHA. The HECM reverse mortgage will allow the homeowner to convert a portion of the home's equity into cash. When the home no longer serves as the borrower's principal residence, the borrower or the borrower's heirs must repay the mortgage. Individuals who take out an HECM reverse mortgage must own their own home outright or have a low mortgage balance that they will pay off when they receive their HECM reverse mortgage. Borrowers of a HECM reverse mortgage must agree to receive consumer counseling from an HECM counselor.