FHA Loans
Backed by the Federal Housing Administration, FHA loans are great for first-time buyers with lower credit scores and minimal down payments.
Federal Housing Administration (FHA) loans are a great option for first-time homebuyers or those with lower credit scores who may struggle to qualify for conventional loans. These government-backed mortgages require a minimum down payment of just 3.5%, making homeownership more accessible. FHA loans are known for their more lenient credit and income requirements, making them ideal for those with past financial challenges. They also allow for higher debt-to-income (DTI) ratios, enabling borrowers to qualify even with existing debt. However, FHA loans do require mortgage insurance premiums (MIP), which protect lenders but add to the overall loan cost.