Speaking of credit scores, FHA loans have very accommodative credit score requirements. We’re talking scores as low as 580 that require just a 3.5% down payment.
That’s pretty flexible. Of course, conventional mortgages can be had with just a 3% down payment, though a 620 credit score is needed.
FHA stands for Federal Housing Administration, a government agency that insures the mortgage loans to help low- and moderate-income borrowers achieve the dream of homeownership.
They are commonly utilized by first-time home buyers, but available to just about anyone, unlike VA loans, which are reserved for veterans and active duty military only.
One downside to an FHA loan is that mortgage insurance is required, regardless of down payment.