FHA Loans, which are backed by the Federal Housing Administration, allow qualified buyers to purchase a home with a lower down payment than most conventional type mortgages. Loan amounts and appraisal restrictions may vary. These loans are available with fixed or variable rate options.
Other benefits of an FHA Loan include:
- Minimum down payment requirements. Your down payment can be as low as 3.5% of the purchase price.
- Streamlined documentation may be used.
- Gifts from family members to cover down payments and closing costs are allowed.
- Sellers may contribute up to 6% of the buyer’s closing costs and prepaids.