Why do fha

An FHA loan is a type of mortgage insured by the Federal Housing Administration that may let you make a down payment as low as 3. And while FHA loans are federally insured, that protects the lender — not you — in case you default on the loan.

When you apply for an FHA loan, your lender has to follow certain regulations. The lending process will vary based on your credit scores and down payment amount. Keep in mind that interest rates and loan terms can vary. You should shop around to see which lender offers you the most favorable terms for your situation. Zach Wichter. Written by. Zach Wichter is a mortgage reporter at Bankrate. Edited By Suzanne De Vita. Edited by. Suzanne De Vita.

Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Reviewed By Shashank Shekhar. Reviewed by. Shashank Shekhar. Share this page. Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust.

Bankrate Logo Insurance Disclosure. What is an FHA loan? FHA loans vs. Read more From Zach. About our review board. You may also like Mortgage rates crush it again, plunge to a new all-time low. New VA rules aimed at curbing predatory lending for cash-out mortgage refinances.

Is a no-closing-cost refinance right for you? Government Agency. Equal Housing Lender. NMLS Former AFB members: Click here for important information regarding your online banking access. For assistance, call 1 New user? Popular Courses. Part Of. Understanding FHA Loans. Rules for FHA Loans. Home Ownership Mortgage. Table of Contents Expand. FHA Loans vs. Conventional Loans: An Overview. About FHA Loans.

About Conventional Loans. Special Considerations. Pros and Cons of Conventional Loans. Other Government-Backed Loans. What is an FHA loan? What is a conventional loan? What Credit Scores Are Required?

Conventional Loans: An Overview Consumers qualify for various types of mortgages based on their financial profiles. Key Takeaways People with good credit and low levels of debt usually qualify for conventional mortgages. People with little cash for a down payment and a modest credit rating typically qualify for Federal Housing Administration FHA mortgages.

FHA loans require a lower minimum down payment and lower credit scores than conventional loans. FHA loans are backed by the government, unlike conventional loans. FHA Loan vs. What credit scores are required for conventional loans vs. FHA loans? Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Articles.