FHA is by far the best loan program for poor credit/low fico (to learn more about your fico score and what it is click here) borrowers who want to get into a home with a low down payment.  FHA rates are usually no more than conventional good credit jumbo rates and often only slightly more than conforming Fannie Mae. This is a huge relief for borrowers whose credit has been negatively affected because of unfortunate circumstances.  The alternative for those with credit scores below 620 is usually a much higher rate subprime loan program with fixed rates starting at least 2 percent above normal conventional Fannie Mae/Jumbo loan programs. If you need to buy a home and do not have time to let your credit completely heal, or save a larger down payment, FHA is the way to go.


Highlights and Benefits of The FHA Loan Program

1. Non Fico Driven - Allows people with poor credit histories the chance to obtain a mortgage at rates close to those of A credit conventional mortgages.

2. Down payments as low as 3%.

3. FHA allows sellers to contribute 6% of the purchase price of the home towards the buyers closing costs if seller is willing. This is known as seller's concession.

4. Allows the down payment to be gifted from a variety of sources. To read more click here


Disadvantages of the FHA Program

1. Has maximum loan limits.

2. FHA is a full documentation program, you must have w2s or tax returns. If you need a limited documentation program, click here.