An FHA loan is a federal assistance mortgage loan in the United States insured by the Federal Housing Administration. The loan may be issued by federally qualified lenders.
FHA primarily serves people who cannot afford a conventional down payment or otherwise do not qualify for private mortgage insurance.
FHA mortgage loans are issued by federally qualified lenders certified by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.
Low Down Payment: FHA loans typically require a down payment as low as 3.5% of the purchase price, reducing the upfront financial burden on homebuyers.
Lenient Credit Requirements: FHA loans have more forgiving credit score requirements compared to conventional mortgages, allowing individuals with less-than-perfect credit histories to qualify for homeownership.
Flexible Qualification Criteria: FHA loans consider various factors such as employment history, income stability, and debt-to-income ratio, providing more flexibility for borrowers in diverse financial situations.
Government Backing: FHA loans are backed by the federal government, encouraging lenders to extend loans to borrowers who may not qualify for conventional mortgages and often resulting in lower interest rates.
