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Many of the topics discussed on these pages relate to residential mortgage financing programs, the federal agency that administers them as well as the entity which insures the program. These programs are administered by the office of Assistant Secretary for Housing-Federal Housing Commissioner, US Department of Housing and Urban Development. Sections 203b, 203k, Streamlined "K", and HECM reverse mortgages were created to provide affordable mortgages to borrowers who will occupy the homes financed with these mortgages. FHA insures the mortgages once they're closed and funded through HUD-approved lenders. It is important to point out here that HUD and FHA are not mortgage lenders. The lending programs which are administered by HUD and insured by FHA are often referred to as FHA loans due to the important role that agency has filled since its creation. The following paragraphs, portions of which are descriptions used by HUD, provide a brief history of the FHA.    

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Since its inception in 1934, the Federal Housing Administration (FHA) has been meeting the needs of home-buying communities by providing mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. Unlike conventional mortgage loans that adhere to strict underwriting guidelines, FHA mortgage loans require very little cash investment and there is more flexibility in calculating household incomes and payment ratios.


As of September 2006, the FHA was the largest insurer of mortgages in the world, insuring over 34 million properties since its creation by congress seventy five years ago. Although the FHA provides mortgage insurance for single family homes, multifamily buildings, manufactured homes, hospitals and several other property types, the focus of this "Prime Mortgages" site will be the residential one-to-four family homes and mixed-use property types.

More specifically the FHA mortgage programs that will be discussed are: The 203(b) which provides mortgage insurance for the purchase and refinance of one-to-four family homes, the 203(k) which provides mortgage insurance for one-to-four family homes and mixed-use properties that are in need of repair, and the HECM which provides mortgage insurance for reverse mortgages on one-to-four family homes owned and occupied by seniors who have attained the age of 62 years and over.


For many years I have held the belief that the FHA mortgage insurance program was one of the most effective and indispensable for home purchasers, real estate brokers, mortgage brokers and mortgage lenders; as long as the program was implemented properly and in accordance with guidelines set forth by HUD/FHA. I held this believe since making the first home sale in 1979 as a newly hired sales associate of a Queens, New York real estate agency.

The program was solid then and it is solid now. Since that first home sale, which was financed with FHA-insured funds, I continued to work with the FHA as the primary source of financing utilized by home purchasers I dealt with, and saw first-hand the difference the program has made in the lives of many home buyers. The FHA-insured mortgage program is also durable; It has survived a couple of stock market crashes, the PMI program which was supposed to be its replacement, and the flawed "Sub-Prime"  mortgage program which could not outlast it.
 
People familiar with it will tell you that the FHA-insured mortgage program is still going strong; meeting the needs of home-buying and refinancing families, and continues to demonstrate - with the timely introduction of the unique HECM reverse program for seniors - why so many home buyers trust and rely on it for their mortgage financing needs. Meeting housing needs in times of crises and uncertainty is nothing new for the FHA though, because when the agency was created 75 years ago, the housing industry was "flat on its back", according to language posted on HUD’s web page. More about FHA programs on my Prime Mortgages blog.




 
Following are some of the conditions which existed during FHA's early years:
Two million construction workers had lost their jobs; Mortgage terms were difficult to meet for would-be home buyers; LTV requirements were 50% on five year "Interest Only Balloon" mortgages which were basically the only loans available at that time; Only four out of ten households owned homes and everybody else had to rent. America was surely a nation of renters, but due to a practical and common-sense approach to mortgage financing, the FHA was adequate to the task of meeting the needs of the nation's home buying communities and it is still going as strong as ever.
 
For additional articles relevant to FHA-insured mortgages, as well as other financing methods, visit the First Home Purchases site. 
Additional real estate investment purchases available at my Purchasing Real Estate Foreclosures site.For more about 203k, please visit the HUD website
To find out if you qualify for 203k financing, visit a HUD-approved lender at http://www.unitednorthern.com/New_20_Jersey.html and send inquiries to Tony Phillips.
For additional 203k mortgage sources and relevant information, please visit the recently launched B.K.HECM Home Loan search. 
Our most recent effort is Borrower-friendly Loans, a website designed to simplify the mortgage information search process by making available needed resources, data, and lender procedural information to our readers and supporters.
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Notes:
Portions of the above article were excerpted from the HUD website. 

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