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What is an FHA Adjustable Rate Mortgage (ARM)?
FHA Adjustable Rate Mortgage for First Time Home Buyers FHA’s single family ARM (Adjustable rate Mortgage) program provides mortgage insurance for a person to purchase or refinance a principal residence at a lower initial interest rate. A lending institution, such as a mortgage company, bank, savings and loan association, funds the mortgage loan and HUD insures the mortgage. What are the eligibility requirements? You must meet standard FHA credit qualifications. You are eligible for approximately 97% financing. You are able to finance closing costs and the uppermost mortgage insurance premium into the mortgage. You will also be responsible for paying an annual premium. ARMS can only be used in conjunction with Sections 203(b), 234(c), and 203(k). The index used to determine the interest rate is the U.S. Treasury Security adjusted to a constant maturity of one year. Eligible properties are one to four unit structures.Be sure to take the time to understand how this program can assist you with that first home.
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