FHA mortgage loans are issued by federally qualified lenders and insured by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.

FHA loans are an good option, especially for first-time homeowners:

FHA guidelines are not entirely credit driven. They do, however, want to see that your most recent 12 month credit history is clean. Credit problems from 12 - 24 months out will not keep you from getting a loan, but they will need to be explained. Bankruptcies, foreclosures, short sales and consumer credit counseling services will all be judged on a case by case basis. This is why having the right mortgage banker, one who knows how different lenders will react to each of those credit issues, is extremely important for FHA loans. 

 

Here are some general features of FHA Loans:

• Easier to qualify for than conventional loans.
• Lower down payment requirements.
  
• Rates vary based on credit profile in the past 90 days
• Reduced monthly mortgage insurance because of upfront premium
• Often higher in closing costs due to upfront mortgage insurance premiums