Other FHA Loan Options
The FHA 203(b) loan is typically considered the best known FHA loan program for 1-4 unit owner-occupied residential properties (including certain condos and eligible manufactured homes) with the the FHA 203(k) loan running a close second. Both 203(b) and 203(k) loans include fixed rate loan options with 15 and 30-year terms, as well as a variety of adjustable rate loan options. However, the FHA actually offers a wide range of additional loan types. Below, we’ve included the name and a brief description of each loan:
Reverse Mortgage: Only available for homeowners age 62 or older, the Home Equity Conversion Mortgage, or HECM, allows you to supplement your income, with the principal coming due when the home is sold or the borrower dies. Borrowers have the options of receiving the loan funds as regular monthly payments for life, as equal payments spread over an agreed-on period of months, or as a line of credit with lump-sum withdrawal caps.
FHA 245 Loan: Also called the Graduated Payment Mortgage, or GPM, this option is designed for those looking to purchase a single-family home for their primary residence. It is similar to a balloon mortgage, in that the payments increase over time. There are five different options on offer (A, B, C, D and E), and each has its own unique requirements, including down payment amounts. 245 loan programs also include the Growing Equity Mortgage, or GEM, which is designed to pay down your principal faster than with other loans. Like the GPM program, there are five GEM plans (L, M, N, O and P).
Mobile Home Loan: While the standard 203(b) loan can be used to purchase mobile homes, the FHA does offer a mobile home specific loan option. It can be used to purchase the mobile home, the lot, or both, but it does not require you to own the land the mobile home sits on. This makes it a good option for those interested in living within a park or neighborhood where ownership of the land lies with the management/owners of the entire facility.
However, note that there are significant differences where maximum loan amounts are concerned. For those purchasing the mobile home only, the current maximum loan amount is just $69,678. For those buying just the lot, the maximum is $23,226. For the purchase of both home and lot, the maximum is $92,904.
Energy Efficient Mortgage: The FHA offers an Energy Efficient Mortgage (EEM) program that is designed for homeowners who want to upgrade their home and make it more energy efficient. This mortgage requires cost-effective upgrades based on an authorized energy assessment, and has no maximum dollar amount, and it can be added to an existing FHA loan, as well.
FHA Secure Refinance: While no longer active, the FHA Secure Refinance program, which began in 2007, helped protect home loan borrowers from foreclosure. To be eligible, borrowers could not miss more than three mortgage payments in the 12 month period before the loan. FHA Secure Refinancing was available for both FHA and conventional home loan borrowers.
234(c): Also called condo loans, 243(c) loans are designed specifically for those interested in purchasing a condominium unit. The requirements are similar to a 203(b) loan, but there are some loan-specific requirements. The FHA sets the limits on how much can be borrowed in this situation, based on geographic location and how many units are being purchased.