FHA - the Federal Housing Administration was set up by the government. Along with this the government also instituted the FHA mortgage program in 1934 to recover present housing standards and conditions.

At a time before 1934, a down payment was normally 50 percent of the house price and payments were extended between only 1-5 years.

FHA Mortgage Facility

FHA does not lend money openly; rather it purely insures that the total mortgage will be paid to the lender if the buyer defaults. The choice remains with the private lender (a bank, credit union, or savings and loan) to decide whether or not they will lend the money.
The FHA mortgage program tends to be more lenient than conventional mortgages in terms of past credit history. A bankruptcy discharged as little as two years ago may not hinder a homebuyer from qualifying for the FHA program.
Typically, FHA mortgages require only a 3-5 percent down payment. Unlike traditional loans, this money can also be a gift to the homebuyer and does not need to be secured as the homebuyer's own money. Generally there are "points" associated with FHA mortgages that are usually worth about 1 percent of the total mortgage value. These points are paid to lenders to help lower the interest rate of the mortgage.

Borrowers will also have to pay Private Mortgage Insurance (PMI) on the mortgage. PMI is used to ensure that the total amount of the mortgage will be paid to the lender if the buyer defaults. Usually, a PMI will not be put into effect until 20 percent of the mortgage has been cleared. Anyone can take out a FHA mortgage for $150,000 - $300,000 without any restrictions, other than credit applicability along with the eligibility criteria fulfillment.


Obama administration introduces a refinancing program in 2009 to increase the affordability of homes, named as Obama Mortgage. The eligibility criteria to avail it are as follows:-
*Loan Financing should be done only by Fannie Mae and Freddie Mac.
*Homes are used as a Primary Residence.
*Current On Mortgage Payment.

Eligibility Criteria

The essential Documents for avialing the Loan Facility are.
*Employers' name and location
*Social Security Number (SSN)
*Current gross Salary
*W-2 for for the last two years
*Address proof for the past two years.
*Information About Owned Property.
*Existing Loan information


U.S. Department of Housing and Urban Development 451 7th Street S.W., Washington, DC 20410 Telephone: (202) 708-1112 TTY: (202) 708-1455