An FHA loan is a mortgage insured by the U.S. Federal Housing Administration (FHA), allowing low-income borrowers to buy a home when they otherwise couldn't. With this type of loan, first-time home buyers have three advantages: small down payments, low closing costs and looser credit requirements relative to conventional mortgages.
With a minimum credit score of 580, a borrower would need to contribute only a 3.5 percent down payment. FHA-approved lenders, the only type authorized to provide such loans, may also approve borrowers with a lower credit score but will typically require a bigger down payment — about 10 percent.
It is a mortgage insured by the Federal Housing Administration (FHA) with the main benefit being a down payment as low as 3.5%. The catch is that with such a low down payment, one would need a primary mortgage insurance or two. Learn more from this nicely compiled guide at Zillow.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.