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How Do FHA Loans Differ From Conventional Mortgages?

July 27, 2012

FHA guaranteed home loans differ from conventional loans in many ways. The required down payment for FHA home loans is often lower (a minimum of 3.5% down is required, where conventional mortgages may ask higher down payments).

FHA home loans feature no penalty for early payoff, may have lower interest rates and other costs, and FHA loans can be assumed–a borrower may transfer the loan to another qualified borrower rather than having the borrower apply for a new loan.

But FHA home loans are also different because of the primary purpose of an FHA guaranteed single-family home loan–these loans are intended for residences. They are not for investment properties, time shares, etc. FHA loan rules state;

“FHA

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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