What is an FHA loan?
An FHA loan is insured by the Federal Housing Administration (FHA) and issued by an FHA approved lender. Since these loans were designed for low-to-moderate income borrowers, they offer options to borrowers with lower minimum down payments and credit scores. While FHA loans are popular with first-time homebuyers, they are available to anyone who qualifies.
A popular loan for less-than-perfect credit
FHA loans are one of the easiest mortgages to qualify for because they don’t require a large down payment and they are more flexible with credit scores. FHA loans are widely used by first-time homebuyers and can require upfront and annual mortgage insurance premiums.
Who qualifies for FHA loans:
- Homebuyers with lower credit scores
- Individuals with low-to moderate-incomes
- Borrowers who can afford down payments as low as 3.5%
Benefits of an FHA loan:
- More flexible qualification requirements than other mortgage loans
- Down payments as low as 3.5%
- Credit scores as low as 580
- Financing up to 96.5% of home purchase price
All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.