How Do FHA Loans Work?
The FHA works with borrowers to ensure that most can afford a home under their program. As opposed to other loan programs which require a considerable down payment (20% of the home’s purchase price) and excellent credit, FHA loans only require 3% down with the option of rolling in closing costs (typically between $6,000 and $8,000 on an average loan) into the loan itself. These types of loans were designed to help buyers who might not otherwise qualify for housing loans. FHA loans are backed by the federal government. By doing so, the FHA lowers the risk exposure to the bank. This backing makes it possible for the bank to provide a loan to a borrower that may not have qualified otherwise. For more information click this link, FHA loan limits by county for the state of Utah.