First-time buyers, repeat buyers, homeowners looking to refinance—anyone who can meet the minimum program requirements is eligible for an FHA loan. Here are some great reasons to consider an FHA loan.
- Low down payment: Borrowers may only need a 3.5% down payment, rather than the 10% or even 20% you may have heard you need. This money may be a gift from a family member or other source.
- Closing costs may be lower: The program allows for up to 6% in seller contributions to help cover customary closing costs.
- Flexible qualification: FHA guidelines have more flexible requirements than conventional programs. More flexibility means more borrowers may obtain financing.
- Less than perfect credit: FHA loans are often more forgiving of a buyer’s credit history. Approval is based on a variety of factors, including credit history, credit scores, employment history and income. You may still be able to qualify if you’ve had a bankruptcy as recently as two years ago.
- Term options: FHA loans are typically fixed rate, but adjustable-rate loans are also available.