The Federal Housing Administration (FHA) falls under the authority of the U.S. Department of Housing and Urban Development or HUD. The FHA is not a mortgage lender. Their function is more of a type of insurance policy for the lenders. If the homeowner defaults on a loan, the FHA will pay a portion of the loss to the lender.
FHA Home Mortgage Loan
Since the FHA insures home loans, the homer buyer can benefit from a lower down payment. Conventional home loans often require a larger down payment to reduce the risk to the mortgage lender. The FHA has specific guidelines and qualifications for a home loan. These guidelines and qualifications are designed to protect the homeowner as well as the mortgage lender.
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