By Marina Locks

Feb 20, 2013


The FHA (Federal Housing Administration) home loan is one of several government-insured loans. It has been offered by the Federal Housing Administration since 1934 according to HUD (U.S. Department of Housing and Urban Development). This loan type has helped over 40 million families in America purchase a home.


The FHA doesn’t lend money directly to home buyers; they insure lenders against losses that may occur from client default. Because of this, lenders have less strict requirements for borrowers.

One of the features borrowers enjoy the most is the low minimum down payment. There is a 3.5% minimum (check with your mortgage company for an exact percentage), which is a lot less than the requirements for a conventional loan. Additionally, your closing costs may be lower than a standard loan.

Typically, a borrower needs a credit score of at least 620 in order to qualify for this loan. With FHA mortgages, a mortgage insurance premium will be required in addition to your monthly payments. Mortgage insurance is implemented to help lenders protect their interest when allowing borrowers to secure a loan with little cash for a down payment.

With a FHA loan you have the option to get 30, 25, 20, and 15-year terms with fixed rates only. Also, you can pay your mortgage down at any time without getting pre-payment penalties (always check with your Loan Officer for specific guidelines).

Getting the Loan

If you have any questions regarding FHA loans, or if you would like to see if you prequalify, contact one of our licensed Mortgage Loan Originators today!


These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.