Government loan programs - FHA loans

An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. Available to all buyers, FHA loan programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans.

FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans are generally market rates, while down payment requirements are lower than for conventional loans.

Some of the other benefits of FHA financing:

• a 3.5 percent down payment is required.
• Funds may be available for downpayment assistance.
• Closing costs can be financed.
• Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
• More flexible underwriting criteria than conventional loans
• FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
• Loans are assumable to qualified buyers.

Minnesota Mortgage Rates Below 4.5%!

I know many Minnesota first time home buyers are bummed out about the tax credit going away but hey, the fact is that with Minnesota mortgage rates hovering below 4.5%, now is still an incredible time to buy a home.  Add to that the fact that Minneapolis homes prices have been falling for the past two years and you really don't have a lot of reason not to buy a home today!


When my wife and I bought our first home, we were able to assume the sellers 9% mortgage and we were thrilled.  At the time mortgage rates in Minnesota were around 11%.  In my humble opinion, anyone who is making excuses as to why this isn't the right time to buy a home simply wasn't a real home buyer anyway. 

If you are paying attention to the falling home prices and rock bottom interest rates and you are thinking about buying a home in the Twin Cities metro area, visit www.mnonlinemls.com to get free access to the Minnesota MLS and see thousands of Minnesota homes for sale in every price range.

The fact is, owning a home will always be a smart component of your personal wealth plan so feel free to call Metropolitan Financial Mortgage Company with any questions you may have regarding financing your new home and locking in today's unbelievably low mortgage rates!