Many home buyers are interested in getting an FHA loan because the requirements are easier to meet. This type of mortgage is insured by the Federal Housing Administration. Here are some advantages to an FHA loan.

The FHA down payment is only 3.5 percent. Traditionally, mortgages require 20 percent of the cost of the home as a down payment.

Your credit score doesn’t have to be perfect for an FHA loan. You need a credit score of 580 or higher to qualify for the 3.5 percent down payment. If your credit score is between 500 and 579, the down payment would be 10 percent or more.

The FHA also offers a loan for buyers who need to make repairs to their home. The loan amount is calculated on the value of the home after repairs would be made. The home buyer can borrow up to $35,000 for nonstructural repairs.

If you have a serious problem financially and are having difficulty making your monthly payments, financial hardship relief is available. You may be able to extend the length of your loan, lower the interest rate, or take a certain amount of time to catch up on your payments or defer part of the balance.

Finally, FHA mortgages are assumable. That means when you sell your home, the buyer may be able to just assume your loan. This means that people who have gone through a foreclosure or bankruptcy may be able to assume the FHA loan.

 

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