• FHA insured mortgages are available for several purposes.mortgage image by hans slegers from Fotolia.com
  
  Federal Housing Administration (FHA) mortgage insurance allows lenders to provide mortgage loans with a government-backed insurance program that insures the loans are repaid. FHA-insured loans allow homeowners and home buyers to obtain home mortgages with significantly less than the traditional down payment or equity of 20 percent. FHA-insured mortgages can provide financing for up to 96.5 percent of a home's value.
  
  

First-Time Home Purchase Financing

• The FHA provides mortgage insurance for first-time and other qualified home buyers that allows them to finance a home with down payments as low as 3.5 percent of the purchase price. FHA-insured loans for the purchase of a new home have an upfront mortgage insurance premium of 2.25 percent which can be included in the mortgage principal.
  
  FHA-insured loans also include a mortgage insurance premium in each monthly payment. FHA rules allow the home seller to pay up to three percent of the house cost towards the closing costs of the home and mortgage.
  
  There is a maximum mortgage amount that can be insured by the FHA program. The maximum mortgage level is based on the location of the home and in 2010 the maximum FHA loan limit ranges from $271,050 up to $729,750.
  
  

Cash Out Refinancing

• Homeowners who have equity in a home may refinance with an FHA-insured mortgage to take equity out as cash through refinancing. FHA refinance loans where the homeowner takes out cash equity can be done for up to 96.5 percent of the home's value.
  
  A refinance where cash is taken, requires the full FHA application process including meeting the credit score requirements, debt-to-income requirements and FHA-maximum loan limits. The FHA upfront and ongoing mortgage insurance premiums are also charged.
  
  

Streamline Refinancing

• The FHA Streamline refinancing program allows homeowners with existing FHA mortgages to complete a simple application to get a new FHA loan with lower interest and payments. Streamline refinance loans require the homeowner to have made at least 12 consecutive house payments on time and must result in lower mortgage payments.
  
  The only credit check is proof of employment. Homeowners who are willing to pay the closing costs in cash can have a Streamline loan with no appraisal. Rolling the closing costs into the loan requires a home appraisal to verify there is sufficient equity in the home to cover closing costs.
  
  

Fixer Upper Mortgage Program

• The FHA 203(k) loan program allows homeowners to get a mortgage that includes money to pay for repair and remodel of a home to be purchased. Extra money is included in the mortgage amount to pay for repairs and allows the home buyer to get a mortgage for more than the current value of the home.
  
  The money in the loan amount designated to pay for the home remodel is placed in an escrow account and paid out to contractors that accomplish the work. The fixer upper program also allows the inclusion of up to six monthly mortgage payments in the money for repairs.
  
  

Reverse Mortgage

• Homeowners who have debt-free homes or a large amount of equity and age 62 or older can receive an FHA-insured reverse mortgage. A reverse mortgage allows the homeowner to take out the equity as a loan with no repayments required as long as they are living in the home. A reverse mortgage can be set up as monthly payments to the homeowner or as a line of credit that can be drawn upon at the homeowner's discretion.