Definition: Loan insured by the Federal Housing Administration against default by the borrower. FHA carries guidelines that allow a seller to pay 6% of the sales price as a credit to the borrower, and the ceiling loan amount is $362,790 for a single family residence.
Also Known As: An inexpensive way to enter the real estate market. FHA loans took a hit in the '90s when no-money-down with 80% / 20% piggyback loans were popular. Suddenly, nobody wanted FHA. But that has changed.
Examples:
During times of rapid appreciation, FHA has increased its maximum loan amounts to let more borrowers qualify to use FHA loans.
