FHA Loan 203(b) Mortgage Insurance
What is the purpose of this program?
FHA Loan Section 203(b) is the most popular FHA program. You may use this program to purchase new or existing 1-4 unit structures, condos or townhomes, in both urban and rural areas. It provides mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A section 203(b) fixed mortgage may be repaid in monthly payments over 15 or 30 years.
FHA 203(b) Quick Reference:
- Eligible properties are one-to-four unit structures.
- The borrower must meet standard FHA credit qualifications.
- Borrowers with less than perfect credit may still qualify.
- You do not need to be a first time home buyer to qualify for an FHA 203(b) mortgage.
- 3.5% cash investment. The borrower is eligible for approximately 96.5% financing. The borrower is able to finance the upfront mortgage insurance premium into the mortgage. The borrower will also be responsible for paying an annual premium.
- Buy or rehabilitate in older, declining urban areas. Rehabilitation mortgage can cover $5000+ in rehab costs plus home purchase. Loan can also be used to rehab existing home.
- In many cases, closing costs can be wrapped into the mortgage.
- FHA insures mortgages with special terms for public servants such as police and teachers; Homeowners over 62 years old (reverse mortgage); victims of disasters; Individuals living on tribal reservations and other restricted lands.
- To learn more about the mortgage limits in your area, go here.
- To find FHA Lenders in your area, go here.
FHA Frequently Asked Questions (FAQ)
- 203(b) Mortgage Insurance
- FHA Insured Mortgage Programs
- FHA/HUD Frequently Asked Questions
- General Single Family FAQs
- HUD Common Questions
- FHA online knowledge base
- FHA's 203(k) Mortgage
- Housing's Keyword Index
For More Information Contact FHA
- You can find more information about FHA programs at www.fha.gov or by calling 1-800-CALLFHA (1-800-225-5342).
- To find a HUD-approved housing counseling agency call 1-800-569-4287 or visit HUD's website at www.hud.gov and click on "Talk to a housing counselor" under "At Your Service".
- Contact FHA approved lenders in your area. Names of lending institutions can be found in the yellow pages of the telephone directory under the heading of "Mortgages." or you can search for an FHA lender on HUD's website.
- Visit the FHA Resource Center for more information on all FHA programs.
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