And because it's an FHA loan, lenders will offer you lower, more affordable rates. They can do this because the FHA guarantees the loans, thus insuring the FHA loan to lenders so they have less risk by taking you on as a borrower.

FHA loans offer a loan guarantee for mortgage companies. If you acquire a FHA loan to purchase a home, the FHA is not actually lending money to you, the buyer; the FHA simply guarantees the lender in case you, the borrower, default on your mortgage payments. Sellers love Buyers with an FHA loan!

You can pay as little as 3.5% of the purchase price of your home for your down payment, and finance your closing costs with your mortgage loan. The FHA can guide you toward programs that require no down payment.

You can purchase a home in need of repairs and finance the repair costs with the mortgage. This way you can make the necessary repairs immediately without having to come up with the money yourself.
You can purchase manufactured homes and condominiums with a FHA loan.
You can finance the cost of energy-efficient repairs with the mortgage.

A FHA loan can allow you to include the costs of your home improvements in your loan. With HUD's 203 (k) program you can purchase or refinance a home that needs improvements and include all repair and improvement costs in the loan.

Compare: FHA vs conventional loans.

Additional FHA Information:
FHA loans are funded by financial institutions such as mortgage centers or banks. The Federal Housing Administration is a branch of the Department of Housing and Urban Development and provides lenders with insurance on your loan. The FHA is here to help you become a homeowner. Both the FHA and HUD offer low-interest loans to qualified borrowers so that they may purchase homes. The FHA and HUD also offer mortgage insurance for those who are part of the VA Home Loan Guarantee Program.

Contact our loan specialist to see if you are eligible for an FHA loan.