FHA-insured Financing: Low Interest Rates, Long Terms
Many people aren’t aware that FHA-insured financing offers some of the industry’s longest terms. For example, the HUD 221(d)(4) program is a fixed-rate construction loan. This product is fixed for 40 years plus up to 3 years for construction (43 years total). And HUD 223(f) loans are fully amortizing for as long as 35 years (as long as the term and amortization isn’t more than 75% of the property's remaining economic life).
Not only that, but these loan products are fully amortizing and have the industry’s longest amortizations. If that wasn’t enough, FHA-insured financing provides the most flexibility on DSCR (debt service coverage ratios). These things translate into huge savings for borrowers.
Overall, longer amortizations produce lower payments. Moreover, these products come with lower rates than Fannie Mae and Freddie Mac 10-year fixed-rate loans. Furthermore, FHA-insured loans are government-insured loans that earn a AAA credit rating.
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