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South Windsor FHA Mortgage Loans

FHA stands for the Federal Housing Administration and is a part of HUD, the Department of Housing and Urban Development. The loan is provided by a lender and not the FHA. FHA guarantees the loan in case the loan goes to foreclosure. FHA loans currently allow for up to 96.75% financing.

Highlights of the FHA program:

1. 96.75% financing
2. Lenient credit qualifying
3. Seller can pay closing costs
4. Interest rates at or below conventional rates
5. Very low monthly mortgage insurance when compared to conventional loans

FHA can be either 15- or 30-year fixed rate loans or 1-, 3- or 5-year Adjustable Rate loans. The interest rates currently are lower than many conventional loan programs. There are two basic charges for using the program: (1) an Upfront Mortgage Insurance Premium (UFMIP) and (2) a Monthly Mortgage Insurance (MI) payment.

The UFMIP is on a sliding scale based upon the amount of the down payment and the credit score of the borrower(s). The UFMIP is not an out-of-pocket expense but, rather, it is simply added to the loan amount. The MI payment is 0.55% per year and is included in the monthly mortgage payment. Think of these as costs of using this special program.

FHA has special qualifying criteria that can make these loans easier to get than other conventional products.

For more information about FHA financing in South Windsor, please contact us at (860) 282-6182.