Federal Housing Administration, or FHA loans are the best programs for those looking for loans with great terms but can’t afford a large down payment. Those with less than great credit can also benefit. Not all property is eligible for the loan. It must be used for single-family residences, a maximum amount of $314,827 or $726,525, a minimum 3.5% down if your credit score is over 580, and a debt to income ratio under 43%. Shopping around is just as important for a FHA loan because although the government backs the bank loans, terms are still up to the banks themselves. One extra cost of a FHA loan is mortgage insurance. It is a monthly payment that insures the bank in case the homeowner defaults. Despite this extra cost, the FHA loan is still a great option for those with credit under 700 or with small down payments.
- For those looking to get a home at great terms, the Federal Housing Administration’s residential loan program is a great loan to get.
- The FHA Home loan was a program that was started in 1930 after the great depression. Its aim was to help families buy homes and stimulate the economy.
- The FHA home loan is a loan that is backed by the US Federal government, therefore if a borrower defaults, the FHA will reimburse the lender.
“Having important information from a comprehensive guide to FHA home loans will help you get a better home loan and possibly save you money.”