FHA Insured Loan
A Federal Housing Administration (FHA) loan is a loan insured against default by the FHA. FHA loans have low down payments, low closing costs, and easy credit qualifying. Whether you’re buying your first home or are a senior (62+) in need of assistance securing a loan, an FHA loan might be for you. FHA loans allow people to buy a home with a down payment as small as 3.5%, unlike many other loan types.
In general, those who apply for an FHA loan are limited to median home prices in your area. To find the limits in your region, visit the U.S. Department of Housing and Urban Development website. To qualify for an FHA loan, you’ll need to have a reasonable debt to income ratio.
FHA loans offer a few other advantages:
- 3.5% down payment required on purchase
- Easier to use gifts for down payment and closing costs
- No prepayment penalty
- Financing for home improvement using FHA 203k programs