Definition of Federal Housing Administration:
FHA Low Down Payments Orange County:
The FHA is part of HUD or The Department of Housing and Urban Development. The FHA is a government agency that provides insurance for loans funded by FHA-approved lenders throughout the United States. The Federal Housing Administration insures banks, credit unions, mortgage bankers and other lenders that provide loans to borrowers with low down payments, usually 3.5 – 5%, and competitive interest rates with Fannie Mae and Freddie Mac. The FHA sets the guidelines for the various types of loans it makes available to Orange County borrowers. Borrowers must pay a mortgage insurance premium (MIP) as part of their monthly loan payments that goes to the FHA. If a borrower defaults on his loan and the lender ultimately has to foreclose on the home, the FHA will provide the loan funding to the lender through these public mortgage insurance premiums (PMIP) paid by the borrowers. The FHA DOES NOT make loans – it insures loans.