Federal Housing Administration Loans

FHA Loan

An FHA (Federal Housing Administration) loan is insured against default by the FHA — meaning the lender won't have to write off the loan if the borrower defaults, because the FHA will pay. FHA loans aren't for everybody, but they're a great option for many borrowers, allowing a down payment as small as 3.5%.

Who can get an FHA loan?

Almost anybody. There are no income limits, though there are limits on how much you can borrow based on median home prices in your area (check HUD's website for local limits). You'll need reasonable debt-to-income ratios and a credit score of at least 620 — you don't need perfect credit.

A few other FHA benefits

• 3.5% down payment required on purchase
• Easier to use gifts for down payment and closing costs
• No prepayment penalty
• Financing for home improvement using FHA 203k programs

Park Grove Lending, LLC is not affiliated with or endorsed by the U.S. Department of Housing and Urban Development (HUD) or the Federal Housing Administration (FHA), and is not a government agency.