If you’ve browsed around tcurranmortgage.com you’ve probably noticed I love working with First Time Buyers and I love FHA Insured Mortgage Loans. I think of FHA Loans as the Original First Time Buyer’s Mortgage Program. The FHA was created in 1934 to help a nation of renters become a nation of homeowners. The FHA was created during the Great Depression by a government intent on improving the economy; homeownership is the gateway to a better financial future for American families. The FHA helped families move in, and move up.
Since the loans were insured by Uncle Sam, he wrote the rules for approving the loans (Kinda like the Colonel’s Secret Recipe, when FannieMae and FreddieMac created first time buyer loan programs, they modeled them on the FHA). And those rules were Oh SO MUCH easier to follow for first time buyers. The only mortgage alternatives at the time were small savings banks lending depositors’ money. Small banks loaned depositors’ money using Darwin’s Theory: the survival of the fittest. Since the small local bank only had limited funds to draw on for lending, they would lend only to the very best qualified applicants. FHA filled a gaping void in the lending universe during and long after the Great Depression.
The first mortgage loan I wrote as a Mortgage Banker back in 1989 was an FHA loan. I continued through the 1990’s to help families achieve their goals of homeownership using FHA loan programs. Then came The Boom. FHA faded away. But not for long!
I was jazzed that FHA loans made a much-needed comeback in 2007-2008 to help our industry recover from the Sub-Prime Meltdown.
I’m a true believer, always have been, always will be, in FHA Loans.
My pal Phil Faranda is, too. Here’s his excellent post about FHA Loans.
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Hope that helps!