The Federal Housing Administration

It is a dream of most Americans to have a suitable and decent home to live in.  A home reflects the stability of a family.    However, not everyone can afford to buy a house.  Considering the instability of the economy, people may not be able to afford to buy a house because some Americans have low incomes, and low credit. Because of these factors is why, Congress created the Federal Housing Administration (FHA) in 1934. In 1965, FHA became a part of the Department of Housing and Urban Development’s (HUD) Office.  HUD is the federal agency responsible for programs concerned with housing opportunities in United States.

FHA provides mortgage insurance on single-family, multi-family, and manufactured homes by FHA-approved lenders in United States.  It is the largest insurer of mortgages in the world and provides protection against losses, which are resulted by the homeowner’s default on their mortgage loans.  It protects the interests of both the lenders and the borrowers, and it gives lower income Americans a chance to buy their home.  The lenders will bear less risk because FHA will pay the claim of lenders in the event of the borrower’s default, provided that the loans meet the requirements established by FHA to qualify for insurance.

FHA loans are insured by FHA. They have lower down payment requirements but cannot exceed the statutory loan limits which vary in each state. Moreover, the property financed with the FHA loan must be the primary residence of the borrower. The loan cannot be used for any investment or rental properties.

Today, Americans are the best housed people in the world, and FHA has played a big part for the success of housing communities in US.  It provides a huge economic boost to the country in the form of home and community development.  Now, Americans have their chance to have a decent home.  Indeed, FHA helps become an American dream a reality.

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