Federal Housing Administration

The Federal Housing Administration, also known as FHA, is a government agency that is invested in helping people become first time homeowners. FHA loans have among the most flexible qualification guidelines for consumers. The Federal Housing Administration insures the investors (but not the borrower) who purchase the FHA loan from losses through their mortgage insurance premiums if a borrower defaults. FHA loans tend to have a lower interest rate than a conventional loan and often times the monthly mortgage insurance is also less than you might find on a conventional loan. However, FHA loans do have a few guidelines that are more strict than conventional products when it comes to the condition of the home you are purchasing so not all properties may qualify for this type of financing.