In the heady days of the housing boom, so-called FHA loans ended up being the lonely guy sitting on the sidelines.

After all, at that time the mortgage market had a free-flowing and apparently limitless pipeline of funds for borrowers who had little to no money for a downpayment. Demand for the Federal Housing Administration’s programs to help first-time and low-income buyers dwindled.

That was then, as they say. This is now, when lending policies have gotten considerably more stringent in the wake of the housing downturn.

Suddenly, the government program that’s been around since 1934 is looking a lot more attractive to a lot more people: The agency went from being involved with just 464,000 loans in 2007 to 2 million loans in fiscal 2009, according to a recent speech by its commissioner, David Stevens.

Its share of the market, depending on the region, is 30 to 50 percent.

So, for many homebuyers, FHA is the name of the game these days. Five things to know about FHA mortgages:

1. The FHA doesn’t make loans, it insures them. Participants in FHA-insured mortgages get their loans through conventional lenders whose standards meet the FHA’s.

The agency’s guarantees mean that lenders can be confident that they won’t lose money on the loans and can make more of them — thus, in theory, helping to keep the housing market flowing.

2. FHA loans are attractive to many borrowers because they require as little as 3.5 percent down, compared to the so-called conventional market, which these days typically requires 10 percent down or more for competitively priced rates.

They’re relatively easy to qualify for: The FHA places no income restrictions. Borrowers can have middling credit histories. In addition, FHA policies allow borrowers to include gifts from family members in their downpayments.

Currently, the FHA doesn’t set a qualifying credit score for borrowers, according to FHA spokesman Lemar Wooley.

“We don’t really have a hard minimum score requirement,” he said. “We ask our lenders to look at the entire credit picture, with the major requirement being the ability to repay the loan.”

However, Wooley said, a 580 score (on an 850-point scale) is set to become the minimal requirement, though an implementation date has not been set. Currently, applicants with scores below 500 do need to increase their downpayments to 10 percent, he said.

The FHA allows borrowers to allocate as much as 43 percent of their income to housing and long-term debt costs, which in the mortgage business is called a back-end ratio; conventional loans vary slightly in that cap, although they generally limit their borrowers to a back-end allocation that’s several percent less.

3. FHA’s insurance isn’t free: Homebuyers with FHA-insured loans will pay an upfront premium at the time of closing (2.25 percent of the purchase price) and then for an extended period will make monthly payments to cover the annual cost of the insurance, 0.5 percent of the amount of the loan, Wooley said.

4. As popular as they are these days, FHA-insured loans aren’t for all borrowers.

“I’m not a big fan of government loans,” said Dale Robyn Siegel, a White Plains, N.Y., mortgage broker and author of “The New Rules for Mortgages” (Penguin/Alpha).

Siegel says that if conventional loan paperwork is significant, the FHA’s is even more daunting. In addition, the FHA is strict about the physical state of the home that’s being purchased.

“If the property isn’t in good condition, FHA might reject it,” Siegel said. “If the FHA borrower is lower-income, and then has lower savings after they close (on the house), you have less money to fix it. So the house needs to be in better condition, out of the gate.”

Another potential roadblock: FHA limits the sizes of loans it will insure, from about $271,000 in low-cost areas to nearly $730,000 in high-cost areas.

5. Many borrowers these days think FHA is the only game in town, but it isn’t, Siegel said.

“I would always say, ‘Get a second opinion,’ ” she said.

She said some borrowers with bruised credit presume they’d be ineligible for loans in the conventional market, though that’s not necessarily so. Borrowers with downpayments of less than 20 percent from those lenders still would have to get mortgage insurance from a private source, she said.

Siegel said the threshold for getting an FHA loan sounds more generous than it would turn out to be in the marketplace. “The FICO score (that FHA will permit) is 580, but good luck, try and get it approved,” she said.

More information on FHA-insured mortgages, including its state-by-state listings of mortgage limits, is available at fha.gov.

Ginny:  I’m buying a short sale. We have a signed purchase agreement from both parties. Everything was fine, but now (a month later) my mortgage (broker) said the bank did an appraisal on the property and now wants to increase the price by $5,000 and make other changes to the contract. She says they have that right — is this true?

The purchase agreement has been signed and I have talked to the bank. My lawyer said to sue them, because it should be pending unless we back out of the deal or something else happened that was our fault. — Tamar T., Miami, FLA

Tamar:  Before around 2007, most Americans had never heard of a short sale, and certainly didn’t know anyone who’d either bought or sold via this transaction format if they had heard of it. But the short sale came back into vogue when subprime mortgages began to reset and home values began to drop, leaving about a quarter of American homeowners “upside down,” or owing more on their homes than the homes are worth.

This makes sense, given the basic definition of a short sale, which is the sale of a home for a net price less than the mortgage lenders and lien holders are actually owed.

As many times as I feel like I’ve parroted the basic logistical and transactional contours of a short sale in the name of basic real estate education, clearly the message has not spread as widely as it needs to. This is evident not just in your question, but also in the fact that the question, “What is a short sale?” is one of the most frequently searched real estate questions on the Web these days, per Experian Hitwise, a search data analytics company.

The “short” answer (sorry about the pun — couldn’t help myself) to your question is a resounding yes — the seller’s bank absolutely does have the right to change the terms of your transaction, even though you have a contract signed by both buyer and seller, and even though you’re a month into the transaction.

The longer answer will be another short-sale primer. As I said before, a short sale is by definition a transaction in which the sellers owe more on the home than the net proceeds of the sale will be. Because they are not recouping enough from the sale to pay off the mortgage lenders and lien holders (lien holders include other entities that may have an interest in the house, like the government, if the seller owed back property taxes, for example), all lenders and lien holders with an interest in the house must give their permission for the transaction to close.

As a result, the purchase agreement negotiated between the buyer and the seller in a short-sale transaction is just the beginning of the transaction. Almost always, these days, the purchase agreement expressly incorporates a short-sale supplement or other express terms that state that the transaction terms are subject to the bank’s approval. Look through your documents and see if you see any terms to this effect.

Once the buyer and seller are in contract, that agreement then goes to the seller’s mortgage lenders and other lien holders for their approval, along with a detailed package containing the seller’s financial information and an explanation of the hardship underlying their need to do the short sale.

This is the phase about short sales that makes them take so long — the banks have to process them, negotiate and ensure that they are recouping as much money as possible before you can buy the place. This phase can take anywhere from a few weeks to the better part of a year, depending on which bank(s) are involved.

Most often, under the terms of the short-sale addendum, everything else about your transaction, including your inspections, your contingency period and even your loan underwriting process, is on hold unless and until the bank issues an approval letter stating the terms on which it approves of the short sale of the home.

If these terms are different from the contract terms, you, the buyer, must then decide whether you’d like to take the home on the terms approved by the seller’s bank, or whether you’d rather walk away from the deal.

And, quite often, the bank’s terms are different from the transaction terms that had been negotiated between the buyer and seller. This is well within the bank’s right — they must agree and participate in the transaction, recovering less cash than they are owed, for the transaction to close.

That means they have every right — which they often exercise — to simply refuse to allow the short sale, in which case both buyer and seller are out of luck. Many a disapproved short sale has ended up in foreclosure, in fact. I know a large number of wannabe short-sale buyers who would love to be in your place.

Your contract renders the home pending and the sellers unable to change the terms on you, or to sell the place to another buyer so long as you are in contract (although, note that increasingly banks are exercising their power to accept a higher offer from a buyer other than the one with whom the seller signed the contract. But that’s not your problem right now, so let’s not go there.)

In terms of what you can do from here — your lawyer may be unfamiliar with the short-sale process. Suing the bank should be the furthest thing from your mind. Instead, simply decide whether you’d still want the house at the cost of $5,000 more, or not. You’re welcome to take the bank’s revised terms, reject them outright and back out of the deal, or even to counteroffer them via the seller.

I haven’t personally seen many banks accept counters, but you could certainly try. Just be aware that a counter could easily add another month or more to your transaction.

One thing keeps bugging me about your scenario: Why is your mortgage broker giving you all this information? Why did you not know, going into this deal, what you should expect from a short sale? Your confusion and misinformation are the hallmarks of a buyer who is not represented by a broker or agent.

A buyer’s broker is quite skilled at managing buyers’ understanding and expectations of short sales; if you do have one, you should definitely consult with him or her before making a decision about how to proceed. If not, please consider consulting a local real estate attorney who is familiar with short-sale transactions before you make your next decision.

Ginny:  One of my tenants has asked for permission to keep a dog as a “companion animal.” He gave me a letter from his doctor, but it’s so poorly written that I suspect it’s fake, even though it’s on a letterhead. This guy also seems perfectly normal to me. How can I challenge the legitimacy of this letter without getting into legal trouble? — Raymond R., Atlanta, GA

Raymond:  When a tenant claims to have a disability and asks for special treatment, landlords are within their rights to ask for documentation of two things: that the tenant legally qualifies as a person with a disability, and that the accommodation sought will enable the tenant to live safely and comfortably in the rental.

(If the tenant’s disability and need for the accommodation are obvious — for example, the tenant uses a wheelchair that won’t fit through a doorway — then landlords should skip the request for proof.)

In the past, this documentation almost always took the form of a letter from a doctor. In recent years, however, the U.S. Department of Housing and Urban Development (HUD) has broadened the acceptable sources of confirmation to include, for example, “third-party professionals.” Most often, this term is understood to mean medical professionals.

Landlords are not forbidden from using their common sense when evaluating the documentation a tenant provides. First, however, keep in mind that your impressions of your tenant as “normal” must be put aside. The way this person appears to you is irrelevant. The only evidence you can rely on is what the tenant’s doctor, therapist or other professional provides.

It’s not difficult to concoct fake letterhead and write a letter purporting to be from a doctor. But there’s an easy way to check, first, that this doctor really exists. Doctors are licensed in every state, and the state licensing board will be able to tell you whether someone with this name is licensed.

Most of the time, all you need do is enter the name and see if there’s a match in the licensing board’s website database. If there’s no match, there’s no such doctor and you’ve got your answer.

But what if a doctor by that name exists in your state, and you think the letter-writer simply used his or her name? Here you must tread carefully, because you do not want to be seen as impeding your tenant’s request or harassing your tenant. Don’t demand another letter or ask to speak personally with the doctor.

It may be reasonable, however, to call the doctor’s office, explain who you are and why you are calling, and simply ask for confirmation that the doctor wrote the letter.

Even if the letter is legitimate, you may run up against an objection based on the Health Insurance Portability and Accountability Act (HIPAA), the federal law that protects the privacy of medical information. In that event, consider writing a letter to the doctor, attaching a copy of the letter the tenant provided, and ask for confirmation that the doctor wrote the letter.

If the letter is legit, the doctor should have no problem vouching for its accuracy. But if you’ve uncovered a scam, you can be sure you’ll hear about it, and that the doctor — whose identity has been stolen, after all — will be getting in touch with the authorities to look into your tenant.

While the Fed and the Obama administration insist that recovery is moving forward, the pattern of inbound data produces the same, queasy sensation as their denial in the fall of 2007 and the summer of 2008.

New unemployment insurance claims hit a one-year high, to 500,000 last week. There was no dramatic spike, just steady deterioration. The Philadelphia Fed index yesterday stunned the remaining optimists: Expected to rise from a weak 5.1 in June, it fell to negative 7.7, weakest in new-order and employment components.

The definitive 10-year T-note broke last weekend from the 2.7 range to 2.59 percent, and is still hovering there, but mortgages are under upward pressure from refinance volume that doubled since April, and from the Fed’s halt in buying mortgage-backed securities — it is buying Treasurys now. Purchase applications are dead flat.

The apparent failure of all traditional recession-fighting measures has unleashed a policy free-for-all. Absent any tested theorem for what to do next, the gates of every economic lunatic asylum are wide open, the rational indistinguishable from the mad.

Crazy people are often cheerful, giggling sorts, but this crowd ambling through the countryside conceals a homicidal fraction bent on settling old scores. The oldest feud in finance festers between the “no government” and interventionist mobs, and the former have out the long knives, hoping to finish off forever the hated twin Frankensteins of intervention: Fannie and Freddie.

The long knife of choice is propaganda, “Big Lie” leapfrog, “dezinformatsiya,” (a reference to disinformation tactics employed by government agencies in the former Soviet Union). They demand a return to the good old days of a private-only mortgage system: 20 percent down and the end of all federal involvement, which they say is the sole source of our current trouble.

The last all-private mortgage system in the U.S. had been in place until 1929. Downpayments were 20 percent or more, but the loans were short-term, often callable or balloons, and only about 40 percent of Americans owned homes.

In the greatest financial collapse of all time, from 1929-32 the combination of mortgage default, foreclosure, and falling values collapsed half of the nation’s banks and extinguished deposits, money and credit. Private markets were utterly unable to stop their impulse to liquidate.

That self-reinforcing downward spiral was stopped by government-guaranteed restoration of credit: the Federal Home Loan Bank system in ’32 began to provide liquidity to savings and loan banks, the Federal Deposit Insurance Corp. in ’33 guaranteed deposits, the Federal Housing Administration in ’34 brought the first 30-year fixed-rate mortgages, and Fannie in ’38 became the “secondary” conduit.

The “20 percent down” fable sold by deceitful Wall Street Journal op-eds does not survive the facts. G.I. loans, 1944 to today, have been zero-percent-down; the FHA since then in a range of 3 percent to 5 percent down, both with rigorous underwriting.

In 1972 the private market brought the innovation of mortgage insurance, and 5 percent to 10 percent conventional downpayments.

The S&L disaster was a government failure in two stanzas: The clumsy deregulation of deposit costs put all loans underwater as to rate in 1979 (they were good loans, though); then the grant of commercial/development lending powers, instead of “growing out” of trouble, caused the credit disaster of the ’80s.

All bipartisan work, by the way. As was allowing private interests to seize control of the Fannie-Freddie public-private partnership: bloated portfolios were never intended, and the end result resembled governance by theft.

The “no government” disinformation says that leftish community reinvestment and affordable housing loans wrecked Fannie and Freddie, and in turn caused the whole current disaster.

Not so: The deed was done by private-motive overextension. However, the political drive to extend homeownership to the unprepared was a terrible mistake.

The Big Lie conceals the really big truth: The worst mortgage losses — subprimes, Alt-As, option adjustable-rate mortgages, and second loans — were all private creations. FHA and VA loan programs still stand. Lehman and Bear Stearns do not. Bank of America, Chase and Wells Fargo still choke on their private trash.

There are right and wrong ways to rebuild government support for mortgages. However, just as war is too important to be left to generals, mortgages are too necessary and too dangerous to be left to nouveau Lehmans, Bears and Countrywides.

A former neighbor, John, still wonderfully engaging at 91, has been living in an assisted-living community for nearly three years. He stops by his former primary residence periodically and has dinner with folks in the area about once a week.

His wife, Irene, passed away more than a decade ago and we can still visualize her walking to her tiny studio behind the house.

John and Irene have owned the home for more than 40 years and their three adult children have grown and moved away. While it had been rumored one of them might move in and call it home, various events altered that possibility and the place has sat vacant for most of the past three years.

Recently, John’s financial counselor mentioned to the children that a decision needed to be made — quickly — in order for John to avoid a capital gains tax on the family home. The suggestion caught the children completely off guard because the home needs a significant amount of deferred maintenance to make it appealing to a potential buyer, especially in a soft market.

In order to qualify for the $500,000 capital gains exclusion ($250,000 for single persons), you must have owned and used the property as your principal residence for two out of five years prior to the date of sale. You must not have used this same exclusion in the two-year period prior to the sale. The only limit on the number of times a taxpayer can claim this exclusion is once in any two-year period.

Many taxpayers, including seniors who have already used the one-time “over 55″ exclusion of $125,000, do not realize they are eligible to sell their primary home again — and do it every two years — under the Taxpayer Relief Act of 1997. The 1997 law repealed all former tax laws on primary residences and significantly changed the role of the home in regard to financial planning.

What is often misunderstood is both the earlier one-time exclusion of up to $125,000 in gain for persons over 55, and the ability to defer all or part of a gain by purchasing a qualifying replacement residence have been replaced by the 1997 law. You no longer can utilize parts of the old law, and you absolutely do not have to buy a replacement home.

Persons who used the $125,000 can make use of the new exclusion if they meet the two-year residency test. The law enables seniors to “buy down” to less expensive homes without tax penalties.

For gains greater than the exemption amounts, a 15 percent capital gains tax usually will apply. If your profits are less than the exemption amounts, you probably will not have to keep tax records and account for the profits at tax time.

Homeowners with potential gains larger than the excludable amounts should keep accurate records in an attempt to reduce their gains by the amount of all eligible improvements.

For married taxpayers who file a joint return, only one spouse need meet the two-out-of-five-year ownership requirement, but both spouses must meet the two-out-of-five-year use requirement.

That is, if the husband has owned and used the house as his principal residence for two of the past five years, but his wife did not use the house as her principal residence for the required two years, then the exclusion is only $250,000. This would apply to John.

For those who leave their home because of a disability, a special rule makes it easier to meet the two-year requirement, especially if you were hospitalized or had to spend a significant period in a similar facility.

In such cases, if you owned and used the home as a principal residence for at least one of the five years preceding the sale, then you are treated as having used it as your principal residence while you are in a facility that is licensed to care for people in your condition. This rule enables the family to sell the home to raise cash for the expenses without incurring a large tax consequence.

If you, or your folks, have moved out of the family home, make sure everyone involved is aware of the time frame for capital gains taxes. The bite could be surprising.