FHA Loans for new homes and refinancing have become extremely popular lately.  A mortgage with only 3.5% down?! Refi with ~97% loan-to-value?!. All that and competitive rates, easier qualification for those with less than perfect credit, and limits that may be above the standard $417k in some areas, all combine to make these loans attractive to many.

What makes these home loans special is that they are insured by the Federal Housing Administration, which acts as a mortgage insurer.  Some additional facts:

• The down payment can be as low as 3.5%
• You can refinance with an FHA loan if your loan-to-value doesn’t qualify you for traditional refinancing
• There are no income restrictions – you don’t have to make below or above a certain amount to qualify
• Low rates – FHA Loan interest rates have at times been even lower than those for conventional loans.  And rates don’t vary with your credit score which means you have the same rate whether you’re as low as 580 or as high as 700
• There are also reverse mortgages for older homeowners included in the FHA loan program
• FHA loan limits are based on area home values – e.g., in New York City you may be eligible for a loan over $700k, but only be eligible for $270k elsewhere in the state
• Review and approval is usually just about as fast and painless as traditional mortgage loans.