Does FHA actually finance home loans?
No, the loan is actually made by a bank or mortgage company. FHA only insures the lender in the case of default (foreclosure). This insurance however provides the lender with enough protection to justify more liberal lending terms. 3. Who can apply for FHA Financing? Most any legal resident of the United States can apply for FHA financing, provided that they meet the normal qualifying guidelines. Non permanent residents must be employed and have a Social Security Number. 4. What does it take for a purchaser to be approved for FHA financing? Like most any mortgage applicant FHA borrowers must pass three basic tests; Cash, Credit and Income. 5. What is meant by Cash? By cash, we want to see that the purchaser will have enough money to pay their Down Payment, Closing Costs and Pre-Paids. 6. What is a Down Payment? The Down Payment is initial investment made by the purchaser. It represents the difference between the Sales Price and the base loan amount. For FHA Loans, the minimum Down Paym
