Advantages of an FHA Loan

The FHA (Federal Housing Administration) mortgage loan was the "original" sub-prime residential loan product. By not requiring perfect credit, large down payments, or difficult to satisfy debt-to-income ratios, it continues to provide affordable financing for thousands who do not meet other mortgage loan criteria.

Significance

Home buyers who may not fit the strict requirements of most mortgage loans, called conforming loans, often qualify for FHA products, which have helped millions of people achieve home ownership.

Features

An FHA loan permits down payments of as little as 3 percent, less than perfect credit reports, and higher than normal debt-to-income ratios, permitting many otherwise challenged borrowers to purchase homes.

Misconceptions

Many people mistakenly believe that a FHA loan is targeted to low-income people, is more difficult to get, or is more expensive than a conforming mortgage.

Types

FHA offers both fixed rate and adjustable rate mortgages, both of which are priced very reasonably with easy to manage terms.

Benefits

FHA loans and terms, all of which are affordable, help first-time and returning home buyers to purchase homes when they may not otherwise qualify for other mortgage loans.

Resources

• More about how FHA loans might help