About FHA Loans
FHA home loans are a great way for a first time home buyer to become a home owner. A couple key points about FHA loans:
1. The main advantage of a FHA versus a Conventional loan is that the credit qualifying criteria for a borrower is not as strict as and the down payment requirements are lower.
2. When comparing a purchase money FHA loan against a Conforming mortgage loan, the FHA loan will generally have the least amount of money required to close and a lower payment.
3. FHA loans will allow the borrower who has had a few “credit problems” or those without a credit history to buy a home.
4. An FHA Underwriter will require a reasonable explanation of these derogatory credit items, but will approach a person’s credit history with common sense credit underwriting.
5. Most notably, borrowers with extenuating circumstances surrounding a bankruptcy that was discharged 2 years ago can be approved for maximum financing. Conventional financing, on the other hand, would require 5 years to have passed to be eligible for a mortgage loan.