Mortgage Lending: 9.11.2 FHA Loans
For Federal Housing Administration (FHA) Title I loans, which are available for property improvement or for the purchase of a manufactured home or lot,539 federal regulations require that the note provide for equal installment payments.540 The only exception is that the first or last payment, or both, may be up to 150% of the regular payment.541 These requirements effectively prohibit balloon payments.