FHA

FHA mortgages, which are insured by the Federal Housing Administration, make home financing possible for people who might not qualify for conventional mortgage programs. They offer:

• Flexible approval requirements for people who have less-than-perfect credit or lack a traditional credit history
• Low down payment and closing costs, with the option to use gift money for 100% of the down payment
• Expanded qualifying ratios for people with low-to-moderate incomes

FHA's mortgage insurance programs help low- and moderate-income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages lenders to make loans to otherwise credit-worthy borrowers and projects that might not be able to meet conventional underwriting requirements.

FHA loans are recommended for those borrowers who are first-time buyers, have little money to put down, have a short credit history, or are having trouble qualifying for a Conforming loan.