What are FHA loans? What are HUD homes?

Today I want to discuss two common acronyms used in the real estate industry. These terms have been used frequently in today's market. Let's take a quick look at each of them.

FHA stands for Federal Housing Administration. This is a government agency that insures mortgage loans, it does not actually loan the money, it merely provides mortgage insurance for the lender. If the borrower defaults on the loan, this agency will help cover the lender's loss. Recently, the FHA loan limits for our area was increased: Single family property limit is now $337,500 and 2-family property limit is now $432,050. FHA loans are most commonly used for first-time home buyers because of the low down payment (usually 3% to 5%) required. It also allows for some imperfections on your credit history and provides competitive interest rates.

HUD stands for the United States Department of Housing & Urban Development. This government agency was established to help the consumer purchase homes, by providing regulated standards and the enforcement of fair housing laws. HUD homes are those homes that have been turned over to the government for non-payment of the mortgage, in which they (FHA) insured. HUD homes are basically homes that were financed through FHA type loans that were foreclosed for one reason or another.

Hopefully, this has helped to clear up some confusion on FHA and HUD. There are a lot of HUD homes available for purchase in Southern Ohio, specifically the counties of Adams, Brown, Clermont, Clinton and Highland. Once HUD becomes the official owner of the property, it is placed into a Real Estate company's hands to sell. You can find them by doing a property search on http://www.goneselling.com/ or your favorite MLS search site. If you would like for me to assist you with your property search, don' t hesitate to contact me.

Enjoy Today!