What does the FHA 203(b) loan primarily focus on?

The FHA 203(b) loan primarily focuses on owner-occupied dwellings. This loan program is designed to help individuals purchase a primary residence by making homeownership more accessible, particularly for first-time homebuyers or those with limited financial means. The FHA (Federal Housing Administration) insures these loans, which allows lenders to offer lower down payment options and favorable terms, such as lower interest rates.

The main features of the FHA 203(b) loan encourage homeownership among individuals who might struggle to qualify for conventional financing, emphasizing that the property being financed must be a home that the borrower intends to occupy. By focusing on owner-occupied residences, the program contributes to the stability and community-building aspects of homeownership.

Other types of properties, such as investment properties, commercial properties, or raw land, do not fall under the FHA 203(b) loan's guidelines, as the primary intent is to support individuals purchasing homes to live in rather than to invest or develop for commercial purposes.