FHA

The Federal Housing Administration (“FHA”) provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. This insurance reduces the risk to the lenders because the FHA will pay in the case of a loan default. In turn, lenders are willing to offer loans with a low down payment. The required down payment on FHA loan is only 3.5% if you have a credit score of 580 or higher. However, be aware that this is the minimum credit score required by FHA but an individual lender providing the FHA loans may require a higher score.  

FHA Loan Pros:

  • Easier to qualify than conventional loan
  • Low down payment
  • Loan can be assumed by the buyer when you sell your house if they meet the credit and income requirements. This can be attractive to buyers, and therefore a benefit when selling, if your FHA mortgage has a lower interest rate than the current mortgage rates at the time of sale.

FHA Loan Cons:

FHA Loan
Loan Limits by FHA.com