What is the Federal Housing Administration (FHA)?
The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories.
Mortgage insurance is what allows home buyers to buy a home while having a smaller down payment. It is a monthly fee added to the standard monthly mortgage payment.
Generally speaking, mortgage insurance is no longer required after the home owner has successfully made a certain number of mortgage payments or until the home buyer has paid off a certain percentage of the appraise home value (this percentage breakdown is called "loan to value," or LTV). In some cases, a homeowner might consider a refinance to eliminate mortgage insurance prior to the terms of the initial loan.