FHA Loans for Homebuyers
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FHA Refinancing
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Need to Know
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FHA Programs for Homebuyers
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FHA Adjustable Rate Loan
The FHA Adjustable Rate Mortgage is a HUD mortgage specifically designed for low and moderate-income families who are
trying to transition to home ownership. FHA Adjustable Rate Mortgages, used in conjunction with other
FHA programs, can help keep initial interest rates and mortgage payments to a minimum. Also referred to as
Section 251, FHA Adjustable Rate Mortgage Program insures home purchases or loan refinances on
loans with interest rates that may increase or decrease over time.
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Qualify for an FHA Loan
Compare Refinance Mortgage Rates
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FHA ARM Makes Payments Affordable
FHA Adjustable Rate Mortgages (ARMs) are particularly helpful during periods when interest rates are
high, as it enables borrowers to obtain mortgage financing that is more affordable due to its lower
initial interest rate. This interest rate is adjusted annually, based on market indices approved by
FHA, and thus may increase or decrease over the term of the loan.
FHA Adjustable Rate Mortgages mean that initial interest rates and monthly payments are low, and may increase
over the life of the loan. FHA uses 1-year Treasury Constant Maturities Index to determine interest rate
changes. The maximum amount the interest rate may increase or decrease in any one year is 1 percentage point.
Over the life of the loan, the maximum interest rate change is 5 percentage points from the initial rate.
Lenders must disclose to the borrower the terms of the FHA Adjustable Rate Mortgage at the time of
loan application. In addition, borrowers must be informed at least 25 days in advance of any adjustment
to the monthly payment.
FHA Adjustable Rate Assistance
The beauty of the FHA Section 251 program is that it goes hand-in-hand with other widely used FHA single
family products such as:
- Mortgage Insurance for One to Four Family Homes (Section 203(b))
- Single-Family Rehabilitation Mortgage Insurance (Section 203(k))
- Single-Family Mortgage Insurance for Condominium Units (Section 234(c))
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to Buying a Home with an FHA Loan
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> FHA Step 1
How much can you afford?
> FHA Step 2
FHA says, "Know your rights."
> FHA Step 3
Shop for an FHA loan.
> FHA Step 4
Shop for a place to call home.
> FHA Step 5
Make an offer for the home.
> FHA Step 6
Get a home inspection.
> FHA Step 7
Your homeowners insurance.
> FHA Step 8
Sign on the dotted line and move in.
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