What is an FHA mortgage?

An FHA loan, backed by the government through the Department of Housing and Urban Development (HUD), provides protection to mortgage owners if the borrower fails to repay. Depending on factors like your credit score, FHA loans allow you to borrow a certain percentage of the home value. If your credit score is above 580, you can borrow up to 96% of the home value. With a credit score over 500, you can qualify with a 10% down payment.

FHA loans are advantageous because they enable you to make a low down payment, and even if you have a fair credit score or a bankruptcy record in your credit report, you can still qualify. Additionally, you have the option to include closing costs in your loan.

These are some other requirements to get an FHA loan: 

• FHA-Approved Appraisal: Your home must undergo an appraisal by an FHA-approved appraiser.
• Primary Residence: The property must serve as your primary residence, excluding holiday homes or secondary properties intended for investment purposes.
• Occupancy Timeframe: You are required to move into the home within 60 days of finalizing the deal.
• Mandatory Inspection: A mandatory inspection must confirm that the property meets minimum standards.
• Financial Criteria: Apart from the above conditions, meeting smaller percentages for down payment, mortgage insurance, and income requirements is also necessary.