Finance
Iowa FHA-insured loans differ from conventional loans primarily because:
AFHA loans have no down payment requirement
BFHA loans are insured by the federal government, allowing lower down payments and more flexible qualification standards✓ Correct
CFHA loans are only available for commercial properties
DFHA loans do not require an appraisal
Explanation
FHA loans are insured by the Federal Housing Administration, which protects lenders against default. This allows lenders to accept lower down payments (as little as 3.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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