fha mortgage information

In 1937, under an act of Congress, the Federal Housing Administration was established to provide American families with a unique opportunity to become home owners. Formerly, a home buyer's options were only limited to short term loans ranging from 1 to 5 years in term. Borrowers had to put as much as 40 to 50 percent down on the property and pay off the entire loan balance by the end of the term. FHA revolutionized the mortgage industry at the time by offering the 30 year mortgage and made the possibility of home ownership available to Americans nationwide. Throughout the years, a variety of programs have spawned from this revolution to make home ownership easier, more affordable, and attainable to Americans. 

Though HUD is not a direct lender, it is the Department's responsibility to maintain an ongoing program designed to monitor the overall quality of loans originated from HUD approved lenders. HUD is an insurer of loans, protecting lenders against potential losses suffered from default and foreclosure. The "mortgage insurance premium" collected from the borrower on each loan helps defray costs associated with this program.