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BellaOnline's Home Ownership Editor

Little Known FHA Mortgage Products

FHA (Federal Housing Administration) offers different products for different borrower's needs. Not many people are aware that FHA offers mortgages for rehabilitation and for energy efficiency. These two loan products can be used for purchasing a new home or refinancing an existing home. It is a cost effective way to upgrade a home to today's standards and building codes.

The FHA203k is FHA's rehabilitation program and is a great product to use when purchasing an older home. With today's low priced foreclosures and short sales,many people are taking advantage of this product. It allows buyers the extra money that is necessary to fix the home with such things as a new roof, painting, appliances, etc. This loan type helps many first time home buyers with the maintenance required with their first purchase.This can also be used when refinancing a home loan.

The FHA Energy Efficiency Mortgage, EEM, is a loan insured through FHA and is used to upgrade the energy efficiency of a home. With this loan, extra money is financed to improve the energy efficiency of a home with things such as heating and cooling units, caulking, water heaters, etc. This is a very under-utilized product that not many people take advantage of. Again, this can be used for a purchase or a refinance.

With FHA being the most widely used type of loan in today's market environment, borrowers need to familiarize themselves with their offerings. They offer home owners low interest rates, low down payments are clearly easier to qualify for than the conventional loan. With both of these loans, guidelines are in place to make sure that inspections are done prior to the loan closing and after all of the work has been completed. They are both very well structured loans that have compliance standards in place that protect both the homeowner and FHA.

As more and more people are turning to FHA for their mortgage needs, borrowers should become familiar with their programs. Relying on a lender to provide this information is not enough. Do your homework when it come to home financing and let due diligence be your guide.

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