FHA’s single family ARM program provides mortgage insurance for a person to purchase or refinance a principal residence at a lower initial interest rate. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD.
What are the eligibility requirements?
- Borrower must meet standard FHA credit qualifications.
- Borrower is eligible for approximately 97% financing. Borrower is able to finance closing costs and the uppermost mortgage insurance premium into the mortgage. The borrower will also be responsible for paying an annual premium.
- ARMS can only be used in conjunction with Sections 203(b), 234(c), and 203(k).
- The index used to determine the interest rate is the U.S. Treasury Security adjusted to a constant maturity of one year.
- Eligible properties are one to four unit structures.