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FHA Loans

What is an FHA mortgage*?

An FHA mortgage is issued by federally qualified lenders and insured by the Federal Housing Administration (FHA).  FHA loans are designed for low-to-moderate income borrowers and have more flexible lending requirements.  FHA loans allow the borrower to borrow up to 96.5% of the appraised value of the home.  Since they are backed by the FHA, the down-payment requirement is less stringent and the 3.5% down payment requirement may be provided to the borrower from a gift or grant.  The lower downpayment requirements and less stringent qualification process, makes the FHA loan very favorable amongst first-time home buyers.

*The servicing on these loan products will be immediately transferred to our sister bank, Northwest Bank in Spencer, Iowa.  They may sell the loan to an investor and such servicing may also be transferred to the investor.

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