- An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA).
- These loans offer low down payment and gift options to help borrowers qualify for a home.
- Smaller down payment required (as low as 3.5%)
- Allows for gift funds to help with closing costs and/or down payment
- Allows for seller credit toward recurring and non-recurring closing costs
- Great for first-time home buyers
- Competitive interest rates
- Minimum credit score not required (although lenders have their own requirements)
- Alternative credit may be used when there is no established credit history