- FHA Home loans are an extremely attractive option especially for first time homebuyers, low income parties and people with past credit problems. The Federal Housing Administration (FHA) insures these loans in order to reduce the lender’s risk of loss if a borrower defaults on their mortgage. This provides a greater ability to qualify even under extreme situations. Even applicants with prior late payments, collection accounts, judgements, bankruptcy, short sale and even foreclosure doesn’t always disqualify the borrower. Borrowers can put down deposits as low as 3.5% and still be approved versus 20% down that may be required on other loan programs.
