Understanding
HUD: HUD Loans, HUD Homes, HUD Foreclosures:
FHA is a division
of HUD.
FHA Loans are
issued by HUD (Department of Housing and Urban Development.) FHA is a very
popular route for the first time homebuyer to take. It is not a program
reserved only for first time home buyers. You can buy your third or
fourth home with an FHA loan. The only stipulation is that you may only
have one FHA loan at a time.
The Federal
Housing Administration (FHA), a wholly owned government corporation, was
established under the National Housing Act of 1934 to improve housing
standards and conditions. It's goal was to provide an adequate home
financing system through insurance of mortgages, and to stabilize the
mortgage market.
Thanks to the
insurance products FHA helped to pioneer, such as the long term
amortizing loan, the nation's home ownership rate has soared to an all
time high of 66 percent as of the third quarter of 1997; well on the way
towards the goal of 67.5% by the year 2000.
Today, FHA plays a
critical role in financing for minority borrowers, first time home
buyers, borrowers who have troubled credit history, and borrowers who
have little money to put down on a home.
HUD
also offers homes for sale (HUD homes.) HUD Homes are
basically foreclosures on homes purchased through HUD sponsored
programs. Click the link to find HUD homes or HUD foreclosures:
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Comparison of
HUD/FHA to other Federal Mortgage Programs |
|
Program |
Primary Beneficiary |
Cost |
Direct Government Program |
Loan Limit (Single Family) |
|
Fannie Mae |
Low/Moderate Incomes |
Low |
No - Multiple private lenders |
$359,650 |
|
FHA |
Lower Income/First Time Buyer |
Low |
Yes - Insures Mortgages |
$359,650
|
|
Freddie Mac |
Lower Income/First Time Buyer |
Low |
Yes |
$359,650
|
|
VA |
Veterans |
Low |
Yes |
None |
|
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