<P> Section 251 insures home purchase or refinancing loans with interest rates that may increase or decrease over time, which enables consumers to purchase or refinance their home at a lower initial interest rate . </P> <P> FHA's mortgage insurance programs help low - and moderate - income families become homeowners by lowering some of the costs of their mortgage loans . FHA mortgage insurance also encourages lenders to make loans to otherwise credit - worthy borrowers and projects that might not be able to meet conventional underwriting requirements, protecting the lender against loan default on mortgages for properties that meet certain minimum requirements, including manufactured homes, single and multifamily properties, and some health - related facilities . The basic FHA mortgage insurance program is Mortgage Insurance for One - to - Four - Family Homes (Section 203 (b)). </P> <P> FHA allows first time homebuyers to put down as little as 3.5% and receive up to 6% towards closing costs . However, some lenders won't allow a seller to contribute more than 3% toward allowable closing costs . If little or no credit exists for the applicants, the FHA will allow a qualified non-occupant co-borrower to co-sign for the loan without requiring that person to reside in the home with the first time homebuyer . The co-signer does not have to be a blood relative . This is called a Non-Occupying Co-Borrower . </P> <P> FHA also allows gifts to be used for down payment from the following sources: </P>

What is the purpose of the majority of fha programs