An FHA loan offers a government-insured solution with flexible terms, making homeownership more attainable. Even seasoned homeowners often need to plan meticulously for a new home purchase, but FHA loans can assist some buyers in realizing their homeownership dreams with a reduced down payment.
FHA loans are mortgage options backed by the U.S. Federal Housing Administration. These loans, provided by institutions like banks and credit unions, facilitate home purchases with a lower initial down payment requirement. Buyers may move into their new home with as little as 3.5% down.
Many of the same documentation requirements apply to FHA loans, just as any lender would expect: employment history, appraisal, and debt-to-income ratio. Additional FHA-specific conditions also apply. Buyers might need to provide a 3.5% down payment, more if their credit score falls below 580. FHA loans are exclusively for the borrower's primary residence.
Credit criteria for FHA loans may be more lenient if other factors demonstrate responsible financial management. Lenders evaluate each application individually and may request extra documentation or explanations. They often accommodate buyers with lower credit scores or shorter credit histories than other loan situations.
Primary residence
At Rate Simple, securing your dream home begins with the first step of the mortgage approval process. By initiating your application with us, you're taking the essential stride toward turning your homeownership aspirations into reality.