Because FHA Loans are insured by the Federal Housing Administration, homebuyers have an easier time qualifying for a mortgage. Those who typically benefit most by an FHA loan are first-time home buyers and those who may have less than perfect credit.
Easier to Qualify – Accepting lower credit scores and higher debt-to-income ratio thresholds, FHA loans allow more applicants to qualify.
Low Down Payment – FHA insured mortgages only require a 3.5% down-payment making it easier for people to purchase homes. Additionally the 3.5% can come in the form of gifts.
Allows Applicants with Lower Credit Scores to Qualify – Because FHA insured loans are backed by the government, applicants with lower credit scores have an easier time getting an FHA loan.
Better Interest Rates – With the backing of the government, these loans typically have better interest rates than most traditional mortgage loans.
An important resource for considering a FHA loan is the official Housing and Urban Development website. There you can find even more answers to questions and learn more about insuring your loan through the Federal Housing Administration.
These materials are not from HUD, FHA, or VA and were not approved by HUD or a government agency.