{"id":31878,"date":"2024-08-08T04:15:47","date_gmt":"2024-08-08T11:15:47","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=31878"},"modified":"2024-08-06T10:04:15","modified_gmt":"2024-08-06T17:04:15","slug":"what-is-an-fha-loan-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id31878-what-is-an-fha-loan-2.html","title":{"rendered":"What Is an FHA Loan?"},"content":{"rendered":"<p><a href=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2015\/05\/mortgage-basics.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-31474\" src=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2015\/05\/mortgage-basics.jpg\" alt=\"what is an FHA loan\" width=\"350\" height=\"225\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2015\/05\/mortgage-basics.jpg 640w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2015\/05\/mortgage-basics-300x193.jpg 300w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2015\/05\/mortgage-basics-50x32.jpg 50w\" sizes=\"auto, (max-width: 350px) 100vw, 350px\" \/><\/a>An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration. Although anyone can apply for an FHA loan, they were designed to help people with lower incomes qualify for a mortgage.<\/p>\n<p>Because FHA loans protect lenders against default, the loans usually have better terms than conventional loans. For example, FHA loans require:<\/p>\n<ul>\n<li><strong>Smaller down payments.<\/strong> Often as low as 3.5% of the purchase price.<\/li>\n<li><strong>Lower closing costs.<\/strong> This is possible because FHA loans permit closing costs to be bundled inside the loan.<\/li>\n<li><strong>Lower credit scores. <\/strong>In fact, you can qualify for the minimum down-payment with a credit score as low as 580.<\/li>\n<\/ul>\n<p>FHA loans come with other benefits too. For example:<\/p>\n<ul>\n<li>They&#8217;re assumable<\/li>\n<li>There are no prepayment penalties, so you can <a href=\"https:\/\/lenpenzo.com\/blog\/id15333-question-whats-the-fastest-way-to-pay-down-my-mortgage-early.html\" target=\"_blank\" rel=\"noopener\">pay the loan off<\/a> at any time<\/li>\n<\/ul>\n<p>On the other hand, there are some drawbacks to FHA loans, including:<\/p>\n<ul>\n<li><strong>Mortgage insurance premiums.<\/strong> This is required if your loan-to-value (LTV) ratio is less than 95%. Compare that to conventional loans, which only require mortgage insurance if the LTV is more than 80%.<\/li>\n<li><strong>Maximum loan ceilings. <\/strong>There is a limit on how much you can borrow. The actual amount depends upon where you plan to live; in most cases, it is currently $625,500.<\/li>\n<\/ul>\n<p><em>Readers: This is article 7 of 25 from my no-nonsense &#8220;Mortgage Basics&#8221; quick-reference series.<\/em><\/p>\n<p style=\"text-align: right;\"><span style=\"font-size: smaller;\">Photo Credit: GotCredit<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration. Although anyone can apply for an FHA loan, they were designed to help people with lower incomes qualify for a mortgage. Because FHA loans protect lenders against default, the loans usually have better terms than conventional loans. For example, FHA [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":31474,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[454,487,463],"tags":[],"class_list":{"0":"post-31878","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"category-mortgage-basics","9":"category-real-estate","10":"pmpro-has-access","11":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What Is an FHA Loan?<\/title>\n<meta name=\"description\" content=\"What is an FHA loan? 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