If you don’t qualify for a conventional mortgage, VA loan or USDA loan, FHA loans are here to help. They allow you to put less money down and are more flexible with lower credit scores, but that flexibility comes with marginally higher upfront and annual costs in the form of mortgage insurance premiums. Learn about how FHA loans work here, and whether an FHA loan is the right loan option for you!
What is an FHA loan?
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration (FHA). This means that if you can’t make your payments, the government will cover the losses. The FHA mortgage loan also requires less of a down payment than many other loans and lower minimum credit scores—which makes them especially popular with first-time homebuyers.
An FHA loan might be a good option for you if you have lower credit scores or no history and you have less than 20% of a downpayment.