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FHA (Federal Housing Administration) Mortgage — for borrowers with higher debt-to-income ratios looking for lower down payment options

An FHA mortgage loan is insured by the Federal Housing Administration, which is part of the Department of Housing & Urban Development’s (HUD) Office of Housing.

This insurance protects lenders against a portion of the loss if homeowners ever default on their loans. To pay for this protection, the borrower has to pay a Mortgage Insurance Premium (MIP) at the time of closing and monthly, generally for the life of the loan.

Even with the extra cost of insurance, however, there are many benefits to an FHA loan.

  • Less stringent debt-to-income ratio as compared to a Conventional Mortgage
  • Down payments as low as 3.5% on owner-occupied residences
  • Lower down payment options for two-, three-, and four-family properties

Learn more about FHA Loans

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