The Federal Housing Administration's insurance programs help put borrowers into homes and allows them to refinance when most conventional lenders won't. This is especially true during difficult housing markets. FHA originated in the recession of 1934, when home ownership was low and the United States economy was at its worst. Demand for the government guarantee program among lenders and borrowers has increased substantially since the mortgage crisis started in 2007. "You can apply for an FHA-backed loan from most banks and mortgage companies," advises Interest.com.
Mortgage Data Web produced a Mortgage Market Share Report for 2009 -- a list that summarizes the top ten banks to fund FHA-insured loans on purchase and refinance transactions. The list included: Wells Fargo, Bank of America, Metlife, Flagstar, US Bank, JP Morgan Chase and National City. Other large banks not on this list for biggest FHA producers -- such as HSBC and Capital One -- also offer FHA-insured mortgages.
Front-runner Bank of America is the country's largest bank in 2010. It acquired former mortgage giant Countrywide Financial -- which also originated FHA loans -- in 2008.
Borrowers who bank with credit unions may also obtain FHA loans through their neighborhood branch if it is FHA-approved. Credit unions are not-for-profit, member-owned financial institutions. They are generally a lot smaller than big banks, but can still offer mortgages -- often at lower rates and with less fees than their bank counterparts, says MSN Money.
Nearly everyone in the United States can become part of a credit union. Credit unions consider you for membership based on where you live, where you work and local associations you belong to in order to get you in.
The specific credit union you attend must be approved by the Department of Housing and Urban Development to originate FHA-insured loans. A list of FHA-approved lenders is available on HUD's website.
Mortgage Lenders and Brokers
The public can get an FHA-insured loan from an FHA-approved lender, which differ from banks and credit unions because they generally devote their funds entirely to mortgage origination and servicing. Quickens Loans is one example of a mortgage lending company. It operates nationwide and online as a retail mortgage lender.
Mortgage brokerage firms approved by FHA to participate in their insurance programs are also part of this group, generally referred to as mortgage lenders, if they are HUD-approved to lend directly to the public under FHA programs. Mortgage brokers generally work at the local level, with offices in neighborhoods throughout the country and they may also work online. The Lending Tree is an example of an online mortgage broker that connects consumers with FHA-approved banks and lenders.
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