Here is a way to start with a low monthly mortgage rate. Section 251 insures home purchase or refinancing loans with interest rates that may increase or decrease over time, enabling consumers to purchase or refinance their home at a lower initial interest rate. Under this FHA-insured mortgage product, the initial interest rate and monthly payment are low, but these may change during the life of the loan. FHA uses 1-year Treasury Constant Maturities Index to determine interest rate changes.
The maximum amount the interest rate may increase or decrease in any one year is 1 percentage point. Over the life of the loan, the maximum interest rate change is 5 percentage points from the initial rate. Down payment requirements can be low. Many closing costs can be financed. 100,000 loans will be available this year. (14.175 Adjustable Rate Mortgages). For more information contact your local HUD office, contact the FHA Mortgage Hotline at 1-800-HUDSFHA, or check out the program online at www.hud.gov
Income Eligibility: None
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