What is an FHA Loan?

FHA loans make it possible for you to buy the home of your dreams while keeping cash in your pocket!
FHA loan is a mortgage that is insured by the Federal Housing Administration (FHA) and issued by an FHA-approved lender. FHA loans are designed for low-to-moderate-income borrowers; they require a lower minimum down payment, as low as 3.5%, and lower credit scores than many conventional loans, score of at least 580.
If your credit score falls between 500 and 579, you can still get an FHA loan as long as you can make a 10% down payment. With FHA loans, your down payment can come from savings, a financial gift from a family member, or a grant for down-payment assistance.

Borrowers who qualify for an FHA loan are also required to purchase mortgage insurance. There are two types of Mortgage Insurance Premiums (MIP) —a one time upfront MIP (UPMIP) at the time of closing and an annual MIP (which is charged monthly).

Qualifying Requirements:

Paying down your monthly debt before applying for a mortgage can help put your DTI within an FHA loan requirement.

What Lenders are Looking for: