Federal Housing Administration (FHA) is a popular homebuyer choice. These loans must meet certain requirements.
- Available in a variety of fixed rate and adjustable rate loan options.
- Has down payment options as low as 3.5%.
- May allow you to use a gift or grant for all or a portion of your closing costs.
- You typically have to pay upfront and monthly FHA mortgage insurance premiums.
- Require less cash upfront for your down payment and closing costs.
- Available for all income levels.
- Allows a new buyer to take over the loan if you sell your home (subject to loan approval).
- Allows a co-applicant to help you qualify even if the person doesn’t live in the home.
- FHA loans have the benefits of a low down payment but there are other loan products with the same option.
- Ask for help to compare the overall cost of all products, including the monthly and long-term costs and conditions of the required mortgage insurance.
- You can typically only have one FHA mortgage at a time.
- In many instances, you may find FHA to be a more expensive financing option and should be considered after thoroughly evaluating all other product options that meet your credit qualifying and financial needs.