This is because FHA insurance allows borrowers to finance approximately 97 percent of the value of their home purchase through their mortgage. This program allows the borrower to finance many of these charges, thus reducing the up-front cost of buying a home. However, not all of these up-front expenses can be folded into the mortgage. In addition to the downpayment, the purchaser must pay for items such as the appraisal and the title search. FHA rules impose limits on some of the fees that lenders may charge in making a loan.
All persons intending to occupy the property as their principal residence are eligible to apply.
Any person able to meet the cash investment, the mortgage payments, and credit requirements can apply. The program is generally limited to owner-occupants. Applications are made through an FHA-approved lending institution. Borrowers can locate FHA-approved lenders through the searchable listing provided on HUD s homepage. Program regulations are at 24 CFR 203.49.