The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved lenders. FHA insures these loans on single family and multi-family homes in the United States and its territories. It is the largest insurer of residential mortgages in the world, insuring tens of millions of properties since 1934 when it was created. FAH loan program allowing borrowers who may not qualify for conventional loans to obtain a mortgage loan if they meet criteria set forth by the Federal Housing Administration, who insures the loan. These mortgage loans typically require a smaller down payment than other loan options but may also require the borrower to pay mortgage insurance for the life of the loan.
FHA loan requirements:
- Low down payments: Your down payment can be as low as 3.5% of the purchase price
- Low credit score: applicants have minimum FICO score of 580
- Debt-to-Income Ratio < 43%
- The home must be the borrower’s primary residence.
- Borrower must have steady income and proof of employment
- MIP (Mortgage Insurance Premium) is required.