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What is a FHA loan? An FHA loan is a federal assistance mortgage that is insured by the Federal Housing Administration. The loan can be issued by qualified lenders who meet the requirements of the federal board.FHA loans have allowed Americans who generate lower income than the average to borrow money so that they could buy their own home. If it werent for the FHA loan, they wouldnt be able to afford it.So whenever one asks you the question, "What is a FHA loan?" You can answer his question by stating that it is one of the best things that ever happened to the blue collared American. The program started in the 1930s during the Great Depression.The rates of the foreclosures rose so fast that the program was initially started so that the lenders would be able to come up with the sufficient insurance to those who would want to borrow money. In fact, some FHA programs have been subsidized by the government.The goal is to make this self-supporting depending on the insurance premiums that have been paid by the borrowers.Over a period of time, the PMI companies or the Private Mortgage Insurance companies entered the picture. Now, the FHA serves those who cannot shell out the down payment...more
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