FHA, also known as the Federal Housing Administration, operates under the control of the Department of Housing and Urban Development (HUD) and has the primary responsibility for administering the government home loan insurance program. This program allows buyers who might otherwise not qualify for a home loan to obtain one because the risk is removed from the lender by the FHA. The most popular FHA home loan program nationwide only requires a minimum of 3.5% from the borrower and permits 100% of their money needed to close to be a gift from a relative, non-profit organization, or government agency. The main advantage to a FHA home loan is that the credit criteria for a borrower are not as strict as FNMA or FHLMC. Someone who may have had a few credit problems should not have a problem obtaining FHA financing.
• The Federal Housing Administration insures the loan, which makes taking out a loan affordable and easy for many borrowers that qualify.
• One Family Home - $410,000