A Federal Housing Administration (FHA) Loan is designed to support first-time homeowners pursuing the American dream. An FHA loan may be ideal for many low- to moderate-income households, featuring lower downpayment requirements and less stringent FICO requirements.
FHA loans were designed in 1934 to help more Americans secure a home during the Great Depression. They can only be used to acquire a primary residence and must meet certain property standards that vary by region.
FHA loans often come with stricter limits and higher interest rates.
Borrowers with a FICO score of 580 or higher may be able to secure a home with a down payment between 3.5% and 10%.
Banks issue loans backed by the government's guarantee, making lending less risky for mortgage companies.
Learn more at the U.S. Department of Housing and Urban Development.
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