What is the FHA 203(b)?

The 203(b) is FHA’s standard fixed-rate mortgage on 1-4 unit properties. This is the loan that most lenders refer to simply as an “FHA financing.”

Who is FHA 203(b) For?

The FHA 203(b) loan is designed for borrowers who generally would not qualify for traditional mortgages. The 203(b) loan allows for financing up to 97% of the purchase price (borrowers make a small 3% down payment). The loan features low closing costs and easier credit qualifications than traditional loans.

Because the loan is more risky than traditional mortgages, borrowers must pay mortgage insurance each month for at least five years.

Learn More

More information on taking out an FHA mortgage can be found here: FHA Mortgage Basics.