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What is 'FHA Loan: Basics and Requirements'

FHA loans are offered to low-income individuals who have credit scores as low as 500. Individuals with a credit score between 500-579 can obtain an FHA loan with a down payment of 10%; individuals with a credit score higher than 580 can get an FHA loan with as little as 3.5% down. The Federal Housing Administration does not lend the borrower the money to take on a mortgage or to buy the house. Rather, the borrower pays a monthly or annual mortgage insurance premium to the FHA to insure the loan, which the lending institution issues to him or her. In case of default, the lender’s financial risk is minimized because the FHA would step in to cover the payments..


BREAKING DOWN 'FHA Loan: Basics and Requirements'

FHA loans were introduced after the Great Depression in the 1930s. During this time, defaults and foreclosures skyrocketed. In response, the government created federally insured loans that gave mortgage lenders peace of mind, reduced lender risk and stimulated the housing market. By insuring mortgages, lenders were (and still are) more inclined to issue large mortgages in cases where they normally would not have approved the loan application.

Who are FHA Loans for?

FHA loans are offered to low-income individuals who have credit scores as low as 500. Individuals with a credit score between 500-579 can obtain an FHA loan with a down payment of 10%; individuals with a credit score higher than 580 can get an FHA loan with as little as 3.5% down. The Federal Housing Administration does not lend the borrower the money to take on a mortgage or to buy the house. Rather, the borrower pays a monthly or annual mortgage insurance premium to the FHA to insure the loan, which the lending institution issues to him or her. In case of default, the lender’s financial risk is minimized because the FHA would step in to cover the payments.


Our commitment is to empower people through Real Estate. We offer our clients a broad variety of experience in the industry, from residential to commercial properties, rentals, and even mortgage financing.

As an experienced real estate agency in the Twin Cities, our goal is to provide you with all the resources and information you need to buy or sell real estate. We work with buyers and sellers in Minneapolis & Saint Paul and the surrounding areas and have had extensive training in the latest real estate marketing strategies.  We’re confident that we can offer you knowledge and tools most other agents can’t.

Contact us so we can keep you updated on the latest real estate activities in your favorite Twin Cities community and answer any questions you may have.

Thanks and we look forward to assisting in all of your real estate needs!

America's Realty Group, REALTOR®
20586776
(763) 560-0100

Mortgage Lender Minnesota - America's Realty Group

Mortgage Lender - Brooklyn Center MN

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