The Federal Housing Administration (FHA) has seen a surge in demand for its loan products as the cost of other non-FHA loans have increased and their availability has diminished dramatically. So an FHA loan may be the best option for anyone buying or refinancing in 2009.
 
Whereas private banks and mortgage companies were throwing money out the door two or three years ago to help people buy homes, now they have substantially tightened their purse strings. Down payment requirements are bigger, credit and income is severely scrutinized, and home equity lines of credit and second mortgages are being curtailed. Meanwhile, the FHA is assuming greater responsibility for helping Americans find unusually affordable loans at attractive interest rates, and the agency even has special products designed for those who want to buy a home and have enough cash leftover to do repairs, improvements, and upgrades.
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