7 crucial facts about FHA loans
What is an FHA loan?
In the wake of the housing bubble's collapse, FHA loans have taken on renewed importance for today's mortgage borrowers.
Simply stated, an FHA loan is a mortgage insured by the Federal Housing Administration, a government agency within the U.S. Department of Housing and Urban Development. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan.
Because of that insurance, lenders can -- and do -- offer FHA loans at attractive interest rates and with less stringent and more flexible qualification requirements.
Following are seven facts all buyers should know about FHA loans.