What Are FHA Commercial Loans?

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FHA Commercial Loans are government guaranteed or sponsored loans that are offered by financial lenders and guaranteed by the FHA or Federal Housing Authority. FHA commercial loans are available for buyers with limited cash or credit problems.

Borrowers are required to qualify for the loan and must go through an application process and subsequent approval. Along with other pertinent information, potential borrowers must provide the following: description of the property, loan amount, and a brief description of the intended purpose of the property.

With an FHA loan, the financial risk to the loan is assumed by the FHA, not the borrower or the lender. Plus, the borrower only needs to put down a minimal amount of money and someone other than the borrower can pay the closing cost.

The FHA or Federal Housing Authority provides insurance on mortgage loans that are made through FHA-approved lenders. These lenders can be mortgage companies, banks, or credit unions. The insurance on an FHA loan protects the lender against financial losses. Such losses might result if the borrower defaults on the loan and fails to make his monthly payments.

FHA loans are...

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