FHA Loans

FHA loans are an attractive option, especially for first-time homeowners, because they require a small down payment, allow for lower credit scores and higher debt ratios, and are insured by the Federal Housing Administration (FHA). Basically, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. The borrower can be approved with 3.5% down compared to a higher percentage that is required on most other loan programs.