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FHA Loans

FHA loans are a type of home mortgage loan that allows borrowers to finance a property with small down payments, lower interest rates, and loose credit scores. FHA home loans have been helping homeowners afford houses of their dreams since 1934, and continue to provide Americans with this needed and beneficial service today.

To apply for an FHA loan, use the following form:

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FHA mortgage loans are a type of real estate financing that relieves lenders of some risk when issuing money to a borrower. They are backed by the U.S. Department of Housing and urban Development (HUD), which guarantees part of the loan payment in the event an FHA borrower defaults. As a result, lenders are more prone to grant financing to a borrower at lower interest rates, lower down payments, and lower credit requirements.

In some cases, borrowers can take out an FHA-backed line of credit with zero down. However, most cases come with a small down payment requirement of at least 3.5 percent.

When applying for an FHA loan, borrowers must meet the minimum eligibility requirements. Those requirements include:

  • Meeting standard FHA credit qualifications
  • Being eligible for approximately 96.4 percent of the desired home’s financing
  • Using the home loan for an FHA approved property
  • Meeting other area-specific mortgage requirements
Additionally, borrowers must take a loan out from FHA approved lenders.

There are also FHA Energy Efficient Mortgages (EEMs) that help homebuyers or current homeowners with their utility bills if their homes meet certain energy efficiency standards. To apply for an EEM, speak with an FHA approved lender.

If a borrower is eligible for an FHA home loan, it would be wise to pursue financing of this type since, over 15 or 30 years, FHA loans provide borrowers with thousands of dollars in savings.