August 2, 2017
Where can I apply for an FHA loan? Borrowers who are at the start of their home loan journey might not realize that not all home loans are created equally, that not all types of mortgages are offered by lenders, or what it means to get pre-qualified for a mortgage. What you should know to start is that FHA mortgages are not the same as conventional home loans.
That is why not all lenders offer FHA mortgages. The FHA home loan program has requirements which must be met in order to be an approved FHA lender. When you find a participating lender offering FHA mortgages, you should know that these lenders have taken steps to meet FHA requirements, standards, and have received plenty of guidance on what is acceptable under the FHA program.
The first step is to determine who the participating FHA lenders in your area might be. The second step is to compare participating lenders.
Not All FHA Lenders Offer All Possible FHA Mortgages
In the past, some participating lenders may not have offered construction loans, or chose not to offer FHA mortgages for manufactured homes. The lender is not obligated to offer each and every type of FHA mortgage, so you’ll need to find a participating lender who offers the loan you need.
Your results may vary based on a variety of factors including the economy, the nature of the housing market you want to buy a home in, or even the nature of the property you seek. Some require more paperwork or processing time than others, and depending on location there may be additional requirements for hazard insurance or the need to get a building project on the FHA approved list (this is common for condo unit purchases).
Setting Realistic Expectations
Some types of transactions aren’t possible at all under the FHA loan program. For example, a home loan for a house boat or RV is not allowed with an FHA mortgage. Why?
These items cannot be legally classified as “real property” or real estate-they have no fixed or permanent foundations, and as such the FHA will not approve mortgage loans for them. The same goes for manufactured homes or mobile homes that will not be mounted on a permanent foundation by closing time.
Searching For An FHA Lender
Finding a participating lender could be as simple as going online to search based on terms like “FHA Loans”, or you could take the time to explore the financial institutions in your local area to see which ones offer FHA mortgages. When searching for an FHA lender as a first-time home buyer, you should ask whether that lender offers any incentive programs for first-time home buyers. The FHA loan program itself does not favor first-time borrowers over any other type, but your loan officer may have some options for you.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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