What does the Office of Housing Do?

Many people have heard of the Federal Housing Administration (FHA) but when pressed its hard to come up with a description of what this group does or how they help American people purchase homes.

The FHA provides mortgage insurance for loans made by approved lenders. It is actually the largest mortgage insurer in the world. FHA insurance protects lenders from people who default on their loans as long as they meet certain requirements. If someone does default the lender receives a monetary claim that helps defray the lender’s expenses. Remarkably the FHA is the only government agency that is completely self funded and costs taxpayers nothing.

By helping lower income Americans purchase homes with lower down payments and more generous household income calculations, the FHA stimulates the economy by encouraging more home ownership, more jobs for builders and contractors and other related industries, improves tax bases in certain targeted areas which in turn help local schools and other government funded groups.

Unlike regular loans, if you have an FHA-insured loan you don’t have to come up with a 20% down payment. The cost of the FHA insurance is passed through your lender to you and is tacked onto your monthly mortgage. As you continue to pay down your mortgage balance the FHA insurance will drop.

The FHA has a storied history of over 70 years of helping American people who own homes or who are affected by the industries that are supported by an increase in good economic housing, so basically everyone.