The Federal Housing Administration (FHA) runs several lending programs that can help homebuyers with limited credit or income, including first-time homebuyers. Government-insured FHA home loans – which come as fixed-rate or ARMs – offer affordable interest rates, a low minimum credit score and a down payment as low as 3.5 percent.
Benefits of an FHA loan:
- As low as 3.5% down (10% down based on your credit score)
- Financing for manufactured homes
- Multi-family up to four units, owner occupied purchase & refinance
- Lender credits - you could save thousands
- Streamline refinance
Borrower requirements for an FHA loan:
- 580 minimum credit score*
- Debt-to-income ratio of 50% or less
- Two established credit accounts (examples: a credit card and a car loan)
*with compensating factors