Conventional Loans

HUD's Federal Housing Administration (usually referred to as "FHA") administers a variety of single family mortgage insurance programs designed to make homeownership more readily available. The insurance programs which are currently active are listed below. These programs operate through HUD-approved lending institutions such as banks, savings and loan associations, and mortgage companies. These lenders fund the mortgage which HUD insures.

HUD does not provide direct loans or financial assistance to purchase a house. If you have any questions, or if you are interested in securing an insured loan, you should contact your Local Homeownership Center, HUD-approved lenders in your area, or local HUD-approved counseling agency.

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Single Family Mortgage Insurance
The purpose of this program is to provide 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, or savings and loan association, and the mortgage is insured by HUD.

• The borrower is eligible for 97% financing.
• The borrower is able to finance closing costs and the up front mortgage insurance premium into the mortgage.
• The borrower is also responsible for paying an annual premium.
• Eligible properties are one-to-four unit structures.
• The maximum mortgage amount for a single family unit is $155,250. Lesser limits may be applicable in certrain localities.

• The borrower may be an owner-occupant or an investor.
• Mortgage insurance premium is paid monthly. There is no upfront mortgage insurance premium.
• The borrower can purchase a one-to-four unit property that was completed at least one year before. The number of units on the site must be acceptable according to the provisions of local zoning requirements.
• Homes that have been demolished or will be razed as part of the rehabilitation work are eligible-- provided the existing foundation system is not affected and will still be used. The complete foundation system must remain in place.

• The borrower is eligible for approximately 97% financing. The borrower is able to finance closing costs and will pay a monthly mortgage insurance premium.
• Eligible properties are detached or semi-detached units, rowhouses, or multifamily structures.
• The maximum mortgage amount for a single family unit is $155,250. Lesser limits may be applicable in certain localities.

• The borrower is eligible for approximately 97% financing. The borrower is able to finance closing costs and will pay a monthly mortgage insurance premium.
• A displaced borrower can purchase a home with only a $200 cash investment.
• Eligible properties are one-to-four unit structures.
• The maximum mortgage amount for a single family unit is $36,000. Lesser limits may be applicable in certain localities.

• The borrower is eligible for approximately 97% financing. The borrower is able to finance closing costs and will pay a monthly mortgage insurance premium.
• The project must be approved by HUD for it to be eligible for insurance.
• The maximum mortgage amount for a condominium unit is $155,250. Lesser limits may be applicable in certain localities.

• The use of this program is at the discretion of HUD.
• The borrower does not need to meet standard FHA credit qualifications.
• The borrower is eligible for approximately 97% financing. The borrower is able to finance closing costs and will pay a monthly mortgage insurance premium.
• Eligible properties are one unit structures.
• The maximum mortgage amount is $21,000. Lesser limits may be applicable in certain localities.

• The borrower is eligible for approximately 97% financing. The borrower is able to finance closing costs and the upfront mortgage insurance premium into the mortgage. The borrower will also be responsible for paying an annual premium.
• ARMs can only be used in conjuction with Sections 203(b), 234(c), and 203(k).
• The index used to determine the interest rate is the U.S. Treasury Security adjusted to a constant maturity of one year.
• Eligible properties are one-to-four unit structures. The maximum mortgage amount for a single family unit is $155,250. Lesser limits may be applicable in other areas.

• The mortgage amount is determined the same as any other loan with mortgage based on the lesser of sales price or appraised value. Appraisal would be done from plans and specifications with a requirement for completion inspection. The Builder must supply a HOW warranty policy in order for the borrower to obtain a loan to value in excess of 90%.
• The loan would close in the name of the borrower prior to start of construction.
• Disbursement of Funds is the responsibility of the lender. Interest, commitment fees, inspection fees, hazard insurance, and other financing charges incurred during the construction period shall be the responsibility of the builder.
• Amortization begins no later than the first day of the month following 60 days from the date of final inspection or certificate of occupancy.
• Payment of Mortgage Insurance is within 15 days of the date of closing.
• A request for endorsement should be submitted by the lender within 60 days from the date of final inspection or certificate of occupancy.
• The loan closes using standard FHA documentation with the addition of a Construction Rider to the Note and a Construction Loan Agreement. The construction documents must contain a provision that the construction terms cease to be effective and the FHA terms become effective at the time of final inspection or certificate of occupancy.
• Escrows for Taxes and Insurance are established at the time of loan closing or at the time of final inspection or certificate of occupancy (lender option).
• Builders must be FHA approved.

• The borrower is eligible for approximately 97% financing. The borrower is able to finance closing costs and the upfront mortgage insurance premium into the mortgage. The borrower will also be responsible for paying an annual premium.
• Eligible properties are one-to-two unit existing and new construction.
• The cost of the energy efficient improvements that may be eligible for financing into the mortgage is the greater of 5% percent of the property's value (not to exceed $8,000) or $4,000.
• To be eligible for inclusion in the mortgage, the energy efficient improvements must be cost effective-- meaning that the total cost of the improvements is less than the total present value of the energy saved over the useful life of the energy improvement.
• The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating system (HERS) or energy consultant. Up to $200 of the cost of the energy inspection report may be included in the mortgage.
• The maximum mortgage amount for a single family unit is $155,250 plus the cost of the eligible energy efficient improvements. Lesser limits may be applicable in certain localities.