FHA – Federal Housing Authority

The FHA financially guarantees loans and lifts much of the risk of non-payment and foreclosure from private lenders. It’s imperative to know that the FHA is not a lender. They simply guarantee your loan.

Pros 

• Bankruptcy does not automatically disqualify an applicant
• Lower interest rates
• Lower down payment
• Lower mortgage points and other requirements for closing costs
• Lower incomes may also apply
• Faster resales
• Guaranteed by the U.S. government

Attributes 

• Required down payment
• Higher initial Mortgage Insurance Premium (MIP) compared to Conventional loans, however, MIP is lower
• Lower loan limits than Conventional
• MIP is required regardless of the Loan-to-Value (LTV)