What is an FHA Loan?
An FHA Loan is a mortgage loan insured by the Federal Housing Administration (FHA). The FHA does not provide the loan; rather, it insures the loan for the lender. If the borrower defaults, the lender can seek recourse from the FHA. This lowers the lender's risk and makes them more likely to issue a loan. Several of our first time home buyers buy with FHA insured loans.

FHA Loans require a lower down payment than a conventional loan typically 3.5% though you can put down more. The property will have to meet FHA standards before FHA will insure the loan. This is determined during the appraisal process the appraiser will have to do a special FHA inspection during the appraisal. The inspection is different from your home inspection.

Property condition will play a lot in the home FHA will insure. Therefore it is a good idea for sellers to know what the FHA requirements are before listing their property and be prepared to make some repairs or they may be eliminating potential buyers, A Realtor or lender will be helpful in this matter.

Another thing to keep in mind is not all lenders do FHA loans so that would be a good question to ask your bank before they pull your credit.

As always I am not a lender, though I have helped hundreds of buyers navigate this process, so please contact a local lender for more in depth details. Then contact me when you are ready to buy.

Daryl Short Licensed Real Estate Broker
"Always Available All The Time"