What Is a Federal Housing Administration Loan (FHA Loan)?

A Federal Housing Administration (FHA) loan is a mortgage insured by the FHA, designed for lower-income borrowers. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Federal Housing Administration (FHA) Loan An FHA loan is a mortgage issued by an FHA-approved lender and insured by the Federal Housing Administration (FHA). Designed for low- to moderate-income borrowers, FHA loans require smaller minimum down payments and lower credit scores than many conventional loans do. As of 2020, you can borrow up to 96.5% of the value of a home with an FHA loan (meaning you'll need to make a down payment of only 3.5%). You'll need a credit score of at least 580 to qualify. If your credit score falls between 500 and 579, you can still get an FHA loan provided you can make a 10% down payment. With FHA loans, your down payment can come from savings, a financial gift from a family member, or a grant for down-payment assistance. All these factors make FHA loans popular with first-time homebuyers. Read More » Related to "Federal Housing Administration (FHA) Loan" How to Choose the Best Mortgage for You Finding the right house is only half the battle. The other half is choosing the best type of mortgage. Learn how to pick a mortgage based on your needs. Read More » 5 Things You Need to Be Pre-approved for a Mortgage Before you can get serious about buying a home, you need to get pre-approved for a mortgage which means providing a lender with these five things. Read More » SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. Learn More » Reasons Why Renting Could Be Better Than Buying Owning a home isn't right for everyone. In this article, we explore the reasons why renting makes more financial sense than owning a home. Read More » Related Definitions Loan-to-Value (LTV) Ratio The loan-to-value (LTV) ratio is a lending risk assessment ratio that financial institutions and other lenders examine before approving a mortgage. Read More » Credit Score A credit score is a number between 300-850 that depicts a consumer's creditworthiness. The higher the score, the better a borrower looks to potential lenders. Read More » Credit Report A credit report is a detailed breakdown of an individual's credit history, provided by one of the three major credit bureaus. Read More » Mortgage Insurance Mortgage insurance protects a mortgage lender or title holder if a borrower defaults on payments, dies, or otherwise can't pay the mortgage. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy