FHA home loans are insured against default by the Federal Housing Administration (FHA). FHA loans are available for single family and multifamily, owner occupied homes.
FHA loans allow individuals who may not qualify for a conventional mortgage to obtain a loan. These loans offer low minimum down payments, reasonable credit expectations, and flexible income requirements.
Buy with as little as 3.5% down or even less when combined with down payment assistance to help with the down payment and/or closing costs.
Ideal for first-time homebuyers unable to make larger down payments.
The right mortgage solution for those who may not qualify for a conventional loan.
The main difference between a FHA Loan and a Conventional Home Loan is that a FHA loan requires a lower down payment, and the credit qualifying criteria for a borrower is not as strict. This allows homebuyers without a credit history, or with credit problems to buy a home. FHA always requires Mortgage Insurance as a part of the payment.
Yes, generally a bankruptcy won't preclude a borrower from obtaining a FHA Loan. Ideally, a borrower should have re-established their credit and two years have passed since the discharge of a Chapter 7 bankruptcy, or have a minimum of one year of repayment for a Chapter 13 (the borrower must seek the permission of the courts). Special exceptions can be made if a borrower has suffered through extenuating circumstances like surviving a serious medical condition, and had to declare bankruptcy because the high medical bills couldn't be paid.