FHA is a very popular route for the first time homebuyer to take. It is not a program reserved only for first time home buyers. You can buy your third or fourth home with an FHA loan. The only stipulation is that you may only have one FHA loan at a time.

The Federal Housing Administration (FHA), a wholly owned government corporation, was established under the National Housing Act of 1934 to improve housing standards and conditions. It's goal was to provide an adequate home financing system through insurance of mortgages, and to stabilize the mortgage market.

Thanks to the insurance products FHA helped to pioneer, such as the long term amortizing loan, the nation's home ownership rate has soared to an all time high of 66 percent as of the third quarter of 1997; well on the way towards the goal of 67.5% by the year 2000.

Today, FHA plays a critical role in financing for minority borrowers, first time home buyers, borrowers who have troubled credit history, and borrowers who have little money to put down on a home.

• In Fiscal Year 1997, 76 percent of FHA loans originated were first-time home buyers compared to 68.3 percent in Fiscal Year 1995 and 72.7 percent in Fiscal Year 1996.
• Loan origination's for minority home buyers are increasing. The result is 29% of new homeowners in the past three years.

In keeping with the Government's reinvention efforts, FHA has been very ambitious in innovating, automating, and streamlining the process.

• Many Single Family mortgage insurance programs have been streamlined. For instance, the Section 203(k) purchase and rehabilitation program has been greatly modified. Lenders, Realtors, and nonprofit organizations across the country have received training on how to make the Section 203(k) program work for them and ultimately for you, the consumer.
• FHA has undertaken a demonstration in the area of automated underwriting before beginning to design its own automated underwriting tool as automation saves time and it ensures a more uniform treatment of all applicants.
• In the area of Manufactured Housing, FHA has worked with the industry to ensure that all manufactured homes meet enhanced safety standards.
• Finally, FHA is using the Internet in its business processes. FHA lenders can now submit information concerning their insurance endorsements electronically to a secured world wide web site called the FHA Connection. FHA homeowners can also access information regarding mortgage insurance premium refunds on the HUD/FHA home page.