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FHA

Your Door to Homeownership

The Department of Housing and Urban Development (HUD) has a program that offers insurance by the federal government to lenders against homeowner default. This creates home buying opportunities to some borrowers who would otherwise not qualify. The government's primary objective with the FHA loan insurance program is to create more home buyers who would spend more, which was good for the economy. The attraction for lenders is that FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. Loans must meet certain requirements established by FHA to qualify for insurance.

FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.

FHA loans require a minimum down payment of only 3.5%, less stringent credit restrictions than what is found with conventional loans, as well as the ability for funds to be gifted from relatives, assisting homeowners in making a home purchase a reality. A common misconception with FHA loans is that the loan is given directly from the government which is not the case at all. In fact, Commonwealth Mortgage, LLC is authorized by HUD to be a Direct Endorsed lender authorizing our underwriters to make the credit decision as to whether a borrower qualifies under the FHA program.

Please complete the following for FHA eligibility: