FHA Loan

Overview

  • Government-insured loan program with low credit requirements and closing cost flexibility. 15 and 30 year options offered. Popular among millennials and first-time homebuyers.

The requirements:

  • Documentation verifying finances, income and employment
  • Credit score of at least 580
  • Debt-to-income ratio between 40%-50%
  • Minimum down payment of 3.5%
  • Mortgage insurance required (upfront and monthly premium)

The benefits:

  • Lower rates than conventional loans
  • Low down payment accepted
  • Seller may pay up to 6% of closing costs
  • Overall, an easier loan to qualify for

Right for your situation if:

  • You’re a first-time homebuyer who wants to own, but doesn’t have a significant monthly income
  • You don’t have the down payment needed for a conventional loan
  • You don’t have the credit score or DTI to qualify for a conventional loan