But why is this important! An FHA loan is insured by the Federal Housing Authority and usually offer more attractive terms than a conventional loan. They allow for lower down payments (3.5% while conventional loan amounts can be 10% to 20%) and lower credit scores (580+), so it theory its easier for people to get into a new home. Even if your credit score is lower than 580 you may still qualify, it just means you may have to pay a higher down payment percentage.
The one drawback of a FHA loan is that you must pay a mortgage insurance premium (read more about FHA Insurance), which is designed to protect the lender in the event that the borrower defaults on the loan.
Of course, it’s now just down to your credit score, there are other requirements for qualification. You must have steady employment history and must have a social security number / be a U.S. resident.
You can also only use FHA loans on your primary resident.
If you want more information about FHA Loans then please contact me and I will put you in touch with someone who can answer all your questions.