FHA home loans are insured by the Federal Housing Administration. It may be easier to qualify for an FHA mortgage than a conventional mortgage. Here are some of the reasons you might qualify for an FHA loan if you don’t qualify for a conventional loan.

Low down payment. The minimum down payment is 3.5%. Those funds can be a gift from a family member, charity, or your employer. Generally, a conventional loan requires 5% down.

More lenient credit guidelines. Credit (FICO) scores as low as 580 are accepted. You may qualify with an even lower score depending on other circumstances. Conventional loans often require a score of 620 or higher. FHA also allows you to obtain a loan in as little as 2 years out of bankruptcy or as little as 3 years out of foreclosure. The standard is 7 years for both on a conventional loan.

Higher debt-to-income (DTI) ratios. DTI is the amount of your monthly income that goes toward paying monthly debts. Conventional mortgages generally allow a lower percent while FHA allows for a little higher ratio.

Your experienced mortgage advisor can help you understand these differences. They will help determine which loan option is best for you.

With an FHA loan, you could purchase a home for as little as 3.5% down! Take the first step here by getting pre-approved quickly and easily!