Real Estate Finance
A government-INSURED mortgage available through approved lenders, designed for lower down payments and broader credit access.
An FHA loan is INSURED (not made) by the Federal Housing Administration through HUD. Approved lenders make the loan; the FHA insurance protects them against loss. FHA loans permit down payments as low as 3.5% (LTV up to 96.5%), have flexible credit standards, and are popular with first-time buyers. Borrowers pay an upfront mortgage insurance premium (UFMIP) plus an annual MIP. FHA loans have property condition requirements (must meet HUD minimum standards) and loan limits that vary by county.
Exam Tip
INSURED by FHA, not made by it. 3.5% min down. UFMIP + annual MIP. Property must meet HUD minimum standards.
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