Federal Housing Administration (FHA) Loans


An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency within the U.S. Department of Housing and Urban Development which is provided by a FHA-approved lender. They are a type of federal assistance and have enabled low income earners to borrow money for the purchase of a home that they would not have been able to afford.


  • Fixed Rate FHA Loan: this is a loan type for those who don’t have money for the purchase of a home. This category of people are recent college graduates, newlyweds, or people who are still trying to complete their education.
  • Adjustable Rate Mortgage (ARM): this is a HUD mortgage specifically designed for low and moderate-income earners who are trying to be home owners.
  • FHA Secure Refinance Loan: this is a loan type in which FHA Secure refinancing helps foreclose a threat when a homeowner has adjustable rate mortgages.
  • FHA Reverse Mortgage: this is a loan type for homeowners age 62 and above. It allows the borrower to convert equity in the home into income.
  • Energy Efficient Mortgage: this is a loan type for current / potential home owners that helps them significantly lower their monthly utility bills and include the cost of energy efficient improvements into their mortgages.
  • Graduated Payment Mortgage: this is a loan type for low to moderate incomes but expect them to increase substantially over the next 5 to 10 years.
  • Growing Equity Mortgage: this is a loan type for those with small income but expect their monthly income to increase. Payments start small and increase gradually over time.
  • FHA Loans for Condominiums: this is a loan type for those who purchase housing units in condominium building.


  • Your down payment can be as low as 3.5% of the purchase price, assuming you have at least a 580 credit score. And closing costs can be bundled with the loan.
  • You don’t need reserves are if it’s a 1-2 unit property. For 3-4 unit properties, you’ll need three months of PITI payments.
  • FHA lending limits vary based on a variety of housing types and the state and county in which the property is located.
  • An FHA loan applicant’s past credit performance that demonstrates good credit history and timely payments will likely be eligible for the mortgage.


  • It requires low down payment
  • It can be assumable, which means if you want to sell your home, the buyer can “assume” the loan you have.
  • People with low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.