Course 3 – Unit 1: What is an FHA Mortgage?

What Is An FHA Mortgage?

Of all the available loan programs, though, the FHA loan is the most inclusive and accessible for today’s first time home buyers. When you’re buying a home, finding the monies for a down payment can be challenging. And even if you have a large amount of money to put down on a house, you may decide you don’t want to.

For example, let’s say the home you’re purchasing requires repairs. You may want to save your cash for home improvements. Or, if you’re about to send a child to college or purchase a new car, you may not want to use your cash savings on a down payment for a home.

There are lots of reasons why you may not want to make a large down payment and, thankfully, as a home buyer, one of the most common small down payment loans is the FHA mortgage. Requiring a downpayment of just 3.5 percent, FHA loans account for 1-in- 4 of all home loans made and many first-time home buyers use them for their low rates and ease-of- qualification.

FHA mortgage rates are typically below-market and more home buyers qualify for FHA loans than any other mortgage loan type available.