Final answer:
To secure an FHA loan, a new buyer would not apply to the FHA for an appraisal; instead, they must find an FHA-approved lender. Additionally, they agree to pay for mortgage insurance and ensure the home meets FHA standards. The bank also requires income verification, a credit check, and possibly a co-signer or collateral.
Step-by-step explanation:
In order to secure an FHA loan, a new buyer would normally do all of the following, except apply to the nearest office of the FHA for an appraisal.
This is because the FHA does not provide loans directly to borrowers; instead, a borrower must find an FHA-approved lender who will grant the loan.
The borrower must agree to pay for mutual mortgage insurance and buy a home which meets FHA requirements.
The purpose of the Federal Housing Administration was to encourage banks to offer home loans to those who might otherwise not qualify, and to ensure that the homes funded by these loans met certain safety standards.
When it comes to securing a mortgage, a standard guideline is to make a down payment of approximately 20% of the home's purchase price, though the FHA allows for down payments as low as 3.5% for those who qualify.
Lower down payments do, however, require the buyer to pay for mortgage insurance, which protects the lender in case the borrower defaults on the loan.
Before granting a loan, banks require the applicant to provide information about income sources and conduct a credit check, and they may also require a co-signer or collateral, such as property or equipment, to secure the loan.