Federal Housing Authority (FHA) loan program was designed to increase home ownership by enabling new home buyers to mortgage their new home with a government insured loan and low down payments – as little as 3%. This program, sponsored by the Department of Housing and Urban Development (HUD) is targeted at moderate to low income families, is subject to certain qualifying guidelines as set forth by the FHA. Some relaxed features of FHA loans include good rates, higher debt ratios than conforming loans (lower down payments) and more leniency when it comes to past credit problems.
If you currently have an older FHA loan, and are still paying the original interest rate – you may be eligible to participate in the FHA Streamline Refinance program – which allows for the refinancing of an existing FHA loan with only limited documentation and minimal underwriting qualifications. As long as your loan is current and you are able to refinance without increasing the original loan amount… then there is a high likelihood that you will be able to lower your monthly payments on your FHA loan.