In this article I will be writing about the one of the regulations or act in the USA government for the housing department. This is my first post talking about the non-India housing regulation and occasionally i will be writing about some concepts like this while I am reading interesting news in the internet. The topic which I am going to write in this blog is about FHA(Federal Housing Administration), it is a regulations passed by the USA govt. to make some standards in the USA housing department. I will try to explain as much as possible in this blog, if you have any doubts please post it in the comments section.
What is FHA?
The Federal Housing Administration, generally known as “FHA”, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States.
After the great depression in the year 1929-1930, most of the people in the United States lost their house because of forclosure and could not pay the loan. That made USA govt. to create National Hosuing Act(NHA) in the year 1934. This legislation created the Federal Housing Administration(FHA) to manage the best mortgage rates and mortgage terms on the loans that it insured.
The FHA allowed people to get the loans easily and reduced the down payment to afforable for the common man.
What is FHA Mortgage Insurance?
FHA mortgage insurance provides less risk to the lenders because FHA bears the loss in case of the buyer cannot repay the loan. This will help the lenders to reduce the loss and happy to give loans for the customers without much risk on the default. But, the property must be FHA approved to be eligible for the FHA mortgage refinance. For that reason FHA puts many restrictions on the property.
In this article I explained about the FHA and why it is been created and its purpose. I have provided only the basics on FHA and there is lot of internal things to explore. I will be learning in details and writing the future posts. Please keep reading our blog posts and comment us what you think. Happy Reading!!!.