FHA loan is a federally-assisted loan program insured by Federal Housing Administration, under which the loan may be issued by federally-qualified lenders. These loans are typically made available to American families falling in the lower income bracket. Historically, the program was initiated during the Great Depression in response to staggering rates of foreclosures and defaults. FHA served primarily as insurance during the time.
The primary intention of FHA was to increase home ownership, new constructions, employment, and thus the overall economy.
In recent years, FHA has also introduced the FHA-Secure program, primarily for individuals impacted by the recent sub-prime mortgage financial crisis.
Many borrowers harbor the mistaken notion that somehow FHA provides loans. This is not true. FHA does not provide loans; it insures ones provided by private lenders. If you find a lender who offers FHA loans, then your background will be reviewed to ensure you qualify for FHA insured loans.
One of the primary goals of FHA mortgage insurance programs is to encourage individuals under a certain income bracket (low and medium) to become homeowners.
Since FHA does not provide loans directly, but rather insures them, the first step is to contact one of many lenders who provide FHA loans. FHA, through their insurance program, encourages lenders to provide loans to individuals whom they would not consider otherwise. At Loans.net, you can find and compare many such lenders who specialize in FHA loans. In addition to providing insurance, since the past several years, FHA has also expanded its role to become an administrator of interest rate subsidy and rent supplement programs