The FHA Mortgage

This mortgage is a product for first-time home buyers, and in fact, is geared towards first-time home buyers. This is a government-backed loan that many people use to purchase their first home. This is especially true if you don’t have 20% saved up for the down payment. The down payment on an FHA loan can be 3.5%, and that money can be a gift from a close family member. This mortgage program is an alternative to the conventional mortgage, for those that have lower credit scores.


  • 3.5% minimum down payment, can be from gift funds
  • Relaxed standards for credit score (compared to conventional)
  • Usually a better interest rate


  • Mortgage Insurance Premium to be paid up-front, at closing (higher closing costs)
  • Mortgage Insurance Premium monthly (higher monthly costs)
  • FHA has a minimum standard that the house has to meet, work orders may need to be rectified before closing on the house
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