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FHA Mortgage

FHA is an acronym for Federal Housing Administration. FHA mortgages allow for a lower down payment (3.5% of the purchase price) than what is typical for conventional loans. Historically, FHA has been used to help borrowers that need lower down payment or have had prior credit issues but have been able to reestablish themselves.

FHA still has a Mortgage Insurance requirement that is paid up-front while being rolled into the new loan amount, as well as monthly. FHA does not allow the same flexibility to their mortgage insurance payments as conventional does. An FHA Mortgage requires both the up-front and monthly mortgage insurance premium no matter how much of a down payment is being used.

Another feature of FHA that is different from conventional mortgages is that FHA only requires one underwrite versus a conventional loan that requires mortgage insurance. This typically allows for a faster underwriting process than the conventional loan with mortgage insurance.

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There are two ways to start the home buying process. The first is a prequalification.
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