An FHA loan is a mortgage loan insured by the FHA, a government agency within the U.S. Department of Housing and Urban Development (HUD). FHA loans offer several benefits to homebuyers that make them an attractive option for some.

• Lower down payment requirements: One of the most significant advantages of an FHA loan is its low-down payment requirement. Borrowers can put down as little as 3.5% of the purchase price. This is a great program for first time homebuyers or those who may have difficulty saving for a large downpayment.
• More lenient credit requirements: FHA loans are more forgiving when it comes to credit history and scores compared to conventional loans. Borrowers with less-than perfect credit or a limited credit history may still be eligible for an FHA loan.
• Assumable loans: FHA loans are assumable, which means that if you decide to sell your home, the buyer can take over your existing loan. This feature can be attractive to potential buyers, especially in a rising interest rate environment, as they may be able to assume your loan if they can qualify for the loan. Not all lenders allow this, so check with your lender.
• Lower interest rates: FHA loans offer lower rates than most conventional loans, depending on the borrower’s credit score. With lower interest rates the borrower may qualify for a larger purchase price.
• Flexible qualification criteria: FHA loans have flexible qualification criteria, considering various factors such as income, employment history, and debt-to-income ratio. The guidelines are designed to be more accommodating for borrowers with lower incomes or higher levels of debt, making homeownership more accessible for a wider range of individuals.

Call one of our knowledgeable loan officers for more information.