Is a FHA loan right for you?
Worried about a low credit score or not being able to afford a large down payment? With less strict requirements, a FHA home loan may be the right loan for you.
These are government-backed mortgages insured by the Federal Housing Administration, designed for low-to-moderate-income borrowers and those with less-than-perfect credit.
Benefits of a FHA loan
- FICO Flexibility: The FHA home loan has less strict FICO score requirements, allowing more people to qualify for a home loan.
- Gift Funds Allowed: Gift funds are allowed for the down payment, which means your family can help.
- Flexible Qualification: Requirements for an FHA loan are generally more relaxed compared to other loans.
FHA loan eligibility requirements
- Credit score higher than 500 with 10% down
- Credit score higher than 580 with 3.5% down
- Ability to cover 3.5% down payment
- Reasonable debt-to-income ratio
- Home must be the borrower’s primary residence
