History of FHA Loans

FHA loans have given thousands of Americans the chance to own their own home. They’ve been one of the most successful federal government ideas and implementations to date. They’ve leveled the playing field for obtaining home mortgages.

Patriot Home Mortgage in Mesquite lives by the motto that we help people live better. By offering all types of home mortgage loans, such as conventional loans, VA loans, and FHA loans, we are able to customize a mortgage to fit our customers’ unique situations. Below, we’ll go over a bit of the history of FHA loans. Contact our mortgage consultants today to get started!

What is an FHA Loan?

FHA stands for the Federal Housing Administration, which was created by the National Housing Act of 1934. Thus, an FHA loan is a loan that is backed by the federal government (the FHA). Lending institutions agree to abide by the rules set forth for these mortgages by the FHA in exchange for an assurance that if a default occurs, the federal government will offer recourse for those loans. The idea of the FHA was to allow lower income individuals to qualify for a mortgage who otherwise would not be able to. Typically, FHA loans allow for less of a down payment, which is riskier for banks. This is where the federal government steps in and plays a vital role.

The Need of FHA Loans

Prior to FHA loans, getting a mortgage was difficult, and the mortgage process was extremely different from bank to bank. Down payments were high (sometimes up to 40%), and mortgage were very short-term, which forced people to get another mortgage frequently. FHA set standards, terms, interest rates, and more. As more people qualified for home loans, more banks agreed to offer FHA loans. Now, FHA loans are one of the most popular home mortgages for first-time homebuyers.

FHA Loans Today

FHA loans continue to be popular with home buyers, and they have allowed thousands of Americans to share in the dream of home ownership. Over the years, many changes have taken place as Americans’ needs changed, including being administered now by the Department of Housing and Urban Development.

As of 2020, FHA loans can be obtained by those with a credit score of 580 or more, with a down payment as low as 3.5%, and can be a fixed rate loan or an adjustable loan. FHA loans also have some of the lowest mortgage rates available.


Patriot Home Mortgages in Mesquite offers FHA loans, and many other types of mortgage loans, including conventional mortgages. We are passionate about helping people find the home of their dreams and helping them purchase it. Our mortgage lenders offer friendly and knowledgeable mortgage services. We explain the entire process to you, lay out all of your mortgage options, and then take over from there. FHA loans are one of our favorite types of mortgage loans because they are so valuable to first-time homebuyers. Reach out to our mortgage consultants today for a free consultation!

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