FHA Purchase Loan- Scores Down to 580
An FHA loan is insured by the Federal Housing Administration, who does does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. FHA programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for Conventional loans.
FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans are generally lower than Conventional loans.
Some of the other benefits of FHA financing:
- Only a 3.5% down payment is required.
- Closing costs can be paid by the seller up to 6%.
- Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
- More flexible underwriting criteria than conventional loans
- Loans are assumable to qualified buyers.