Launched in the midst of the country’s toughest economic times yet, the Federal Housing Administration’s home lending program has proven to be a great success. During the Great Depression, it provided crucial support for the national residential real estate market, helping to limit the financial damage done to existing homeowners and making it far easier for others to become homeowners themselves. Even today, with the economy in much stronger shape so many decades later, the FHA lending program remains one of the federal government’s most consistently popular and important functions.
It is also relatively simple to take advantage of, another important reason for its long-lasting popularity. Although the particulars of the program have evolved over the decades, it has generally included a central reliance on partnership with private-sector lending specialists. Instead of extending credit itself, what the Federal Housing Administration has most often done through the various versions of the program is to guarantee loans that private lenders make to qualified borrowers.
What this means today is that most borrowers will not need to look beyond the private lenders they work most closely with. A Houston FHA lender will typically take care of all of the FHA-specific details on behalf of borrowers, filling out the necessary paperwork and the like and otherwise streamlining the process.
In general, then, working with an FHA lender like AMCAP Mortgage will feel more or less like dealing with one that will not be participating in the program. On the other hand, making use of the FHA’s lending guarantees does require a little bit extra in the way of qualifications from borrowers, compared to the usual private lending arrangements.
Even so, these are typically easy enough to learn about and to meet the standards of. Sites like First time home buyer break the current requirements down in ways that make them simple to understand at a glance, so borrowers can be well advised as to their likelihood of qualifying from the start.
What this will most often entail will be being a first-time home buyer with a reasonable credit history and a reliable stream of income of sufficient size. Although private lenders can be relatively flexible with their borrowers when conditions merit these kinds of accommodations, the FHA is comparatively strict with its own lending standards. In fact, falling short of any of the FHA’s standards will mean that a borrower will not be able to take advantage of the program, although lenders can often help their clients come into compliance.
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