How to Find FHA Mortgage Lenders

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FHA mortgage loans are extremely popular among first-time home buyers, and for several reasons. You don't have to put as much money down when using these loans, and the qualification process is generally easier than it is with a conventional mortgage. But in this article, we will focus on one particular aspect of the FHA loan. We are going to discuss FHA mortgage lenders and how they operate.

The FHA Loan Defined

Before we talk about lenders, we need to cover some basic terminology. An FHA home loan is one that is insured by the Federal Housing Administration. This agency is a branch of the federal government, and part of the Department of Housing and Urban Development (HUD). Contrary to popular belief, the FHA does not give loans directly to consumers. Instead, they insure the loans made by regular lenders such as Citi and Wells Fargo, as well as many state and local mortgage companies.

Definition of FHA-approved Lenders

When you encounter the phrase FHA mortgage lender, it generally refers to a mortgage company that has been approved by the Federal Housing Administration to make these kinds of loans. If a lender wants to be on this list, they have to adhere to certain guidelines set forth by the FHA. This includes qualification criteria for borrowers, such as credit scores and income. The FHA mortgage lender must verify that a borrower meets these guidelines, before processing the application any further.

How to Find Lenders

If you want to use this financing option for your home purchase, you must first find an FHA-approved lender and submit an application. Fortunately, it's very easy to find these lenders. You can use this search tool on the HUD website to get started.

The search form has a space for "lender name," but you don't need to fill this in. After all, you wouldn't even have this information if you were starting from scratch). Instead, just enter your city and state and click on the search button. This will give you a list of FHA mortgage lenders in your area. Next, you would contact one of those companies to find out how to submit an application.

Before You Apply for a Mortgage

When applying for a mortgage, it pays to do a little bit of homework first. Here are the steps we recommend taking, before you start talking to lenders:

  1. First, establish your home-buying budget. You would do this by analyzing your monthly income and expenses to find out how much of a monthly payment you can afford. Do this before you start talking to lenders.
  2. Use the HUD website to find FHA mortgage lenders in your city. You are not required to use a lender with an office in your area -- it just makes things easier.
  3. Once you have a list of companies, check them out through the Better Business Bureau website. If a lender is not a BBB member, you should be suspicious and cautious. If the company is listed on the BBB website, find out if they have a history of complaints.
  4. Type the company's name into Google to see what you can find. If there are any complaints posted online, you'll find them with Google.
  5. Once you've done a little detective work, start contacting lenders and ask them how you would apply for an FHA mortgage loan. You'll have to submit an application at some point. You might be able to submit an application online, if the lender offers that. Just make sure you're using a secure website before you enter any sensitive information (such as your SSN).
  6. You can also apply for an FHA loan through a network-based website, such as Lending Tree. You can learn more about that strategy on this page

At some point, the lender will tell you (A) whether or not you qualify for a loan and (B) how much they're willing to lend you. This is the pre-approval process.

We hope you have found this guide to FHA mortgage lenders helpful. If you have additional questions about this topic, you might want to use the search tool at the top of this website. There are hundreds of mortgage-related articles on this website, so there's a good chance you'll find what you need. Good luck with your home buying process.