August 14, 2017
Where can I get an FHA loan? There are plenty of options when you are ready to begin your journey to become a home owner-you can apply in person, or get pre-qualified or apply online. How does it all work?
Who Offers FHA Home Loans?
FHA mortgages are offered by participating lenders who have been approved by the FHA to offer FHA mortgages, refinance loans, FHA Reverse Mortgages, and rehab loans. The FHA itself does not loan the money for you to purchase your home.
The FHA may require the lender, depending on circumstances, to work with the FHA to approve certain home loans, but many FHA lenders have earned the right to offer loans “unsupervised”, meaning they have met standards that permit them to make decisions on loan approval without constantly checking with the FHA. This authority must be earned, but many lenders have it.
What Kind Of Loan Can I Get From An FHA lender?
FHA lenders participate in the FHA program, but they are not required to offer each and every type of mortgage option possible under the FHA loan program. You may find some lenders, depending on the housing market, willing to offer mobile home loans where others do not, or you may learn that construction loans in your housing market are more popular than in other areas.
The lender will decide what types of FHA loans to offer, set standards for FICO scores and other financial qualifications, etc. If your participating lender doesn’t offer one type of loan, you may need to shop around for the FHA loan you require.
Some loans are not possible with an FHA loan-for example, you cannot purchase a houseboat or an RV with an FHA mortgage. Only property that can be classified and taxed as real estate may be purchased with an FHA mortgage.
Does It Really Matter Who I Get My FHA Loan From?
The short answer is “yes”. It does matter because not all participating lenders offer the same terms, interest rates, etc. The FHA does not set or regulate FHA mortgage loan interest rates, so it is definitely in your best interests to shop around for an FHA loan to get the best rates, the most favorable-to-you terms, etc.
Some people get very good results from pre-qualifying for an FHA mortgage online before making any kind of commitment; this can be a useful way to discover how much loan you can afford, the type of price range you can realistically shop in, etc. Comparing lender rates and terms is always a very good practice. Much like shopping for a new car, you don’t want to settle on the very first house, neighborhood, or lender you find.
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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