FHA loans are mortgages provided by FHA-certified lenders and backed by the Federal Housing Administration (FHA). Since the loans are designed for low and moderate-income borrowers, they need a lower minimum down payment and credit score than most traditional loans. Learn more here.
What Makes FHA Loans So Popular?
- An FHA loan is federally insured mortgages meant for low and moderate-income borrowers who might have a poor credit score
- An FHA loan requires a low minimum down payment and a low credit score than most traditional loans
- FHA loans are provided by federal-approved lending institutions and banks who assess your eligibility for the loan
- The loans feature loan limits and some restrictions not available in traditional loans
It’s vital to note that the Federal Housing Administration does not give the loan. Instead, you’ll get a mortgage from an FHA-certified lender such as Desert Springs Mortgage, LLC. Then the FHA will guarantee the loan. For this reason, the majority of people refer to it as an FHA insured loan.
When it comes to repaying the loan, you’ll be required to pay via mortgage insurance premium to FHA. The lenders bear minimal risk since the FHA will pay them a claim if you fail to pay the loan. Learn more about Where to Apply for an FHA Loan.
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