The Federal Housing Administration was created
by the National Housing Act and approved on June 27, 1934. The FHA
was established to encourage improvements in housing standards and
conditions, and to provide an adequate home financing system by
insuring mortgages. The FHA does not make loans or build homes,
but operates insurance programs which provide protection against
loss due to foreclosure on home mortgages made by private lending
institutions.
The most common type of FHA financing is
the fixed-rate mortgage which is insured under Section 203B. Both
fixed-rate and adjustable-rate programs are available. The maximum
term of any FHA mortgage is 30 years and the maximum mortgage amount
for single family homes in Honolulu County is $228,543. The maximum
FHA mortgage amounts for the other Hawaii counties are Maui at $204,250,
and Hawaii and Kauai at $187,300. Financing is also available for
attached town homes, FHA approved condominiums, and duplexes. Check
with your Realtor® or lender for loan limits. Down-payment requirements
vary depending on the loan amount and are approximately 4-6 percent of
the sales price or appraised value, whichever is lower. For specific
details, it will be necessary to know who is paying what closing
costs, and you will need to consult your Realtor® or mortgage broker.
The amount of mortgage insurance premium depends on a number of
different factors. Check with your Realtor® or mortgage lender for
details.
Another nice characteristic of the FHA instrument
is that it is assumable by future home buyers if they qualify. For
more information about FHA mortgages, consult your Realtor® or mortgage
lender.
|
