The FHA Home Loan Program

The journey to homeownership is an exciting one, filled with choices that can impact your financial future. If you’re a first-time homebuyer or someone looking for more accessible financing options, the Federal Housing Administration (FHA) home loan program is a game-changer. Let’s take a deeper dive into what the FHA program offers and how it could be the key to unlocking the door to your dream home.

Understanding the FHA Home Loan Program:

The FHA, a division of the U.S. Department of Housing and Urban Development (HUD), created the FHA home loan program in the 1930s to facilitate homeownership for low-to-moderate-income borrowers who might have limited credit history or smaller down payment capabilities. The program is not a lender itself; rather, it insures loans offered by approved lenders, providing added security to both lenders and borrowers.

Key Benefits:

1) Lower Down Payment: One of the most appealing aspects of the FHA program is the lower down payment requirement for all credit score ranges. FHA loans can be secured with as little as 3.5% down with a 580+ score. This opens up homeownership opportunities to a wider range of individuals and families.

2) Flexible Credit Requirements: FHA loans are more forgiving when it comes to credit scores. While conventional loans might demand higher credit scores, FHA loans often consider lower scores, making it easier for individuals with limited credit history to qualify. You can even get an FHA home loan with a credit score as low as 500 with a 10% down payment

3) Competitive Interest Rates: FHA loans often offer lower interest rates when compared to conventional loans, which can lead to lower monthly payments compared to some other loan types.

4) Affordable Mortgage Insurance: Mortgage insurance (PMI) is an additional insurance you must carry if you put less than 20% down on your home purchase. Conventional PMI rates vary based on the amount of your down payment and credit score. Except for the most qualified individuals, FHA will almost always have lower-cost mortgage insurance and can save borrowers 25-75% on their PMI.

5) Finance Up To 4 Units: The FHA loan allows you to earn rental income by purchasing a 2-4 unit property while enjoying the same 3.5% down payment and other FHA loan benefits. You are required to live in 1 of the units.

6) Assumable Loans: FHA loans are assumable, which means that if you decide to sell your home, the buyer can take over your existing FHA loan, potentially locking in a lower interest rate and saving on closing costs.

7) Streamlined Refinancing: FHA loans offers a streamlined refinancing options that allow homeowners to refinance their existing FHA loans with reduced paperwork and documentation. The FHA streamline refinance does not require proof of income or re-qualification based on income and does not require an appraisal.

Eligibility and Considerations:

While the FHA program has many advantages, it’s important to understand its eligibility criteria and limitations. To qualify for an FHA loan, you must meet certain income, credit, and property requirements. Additionally, FHA loans have loan limits that vary by County.


The FHA home loan program has been a cornerstone of affordable homeownership for decades. It serves as a lifeline for many first-time homebuyers and individuals who need more accessible financing options. Before making a decision, it’s wise to consult with an experienced mortgage professional who can guide you through the process, helping you determine if an FHA loan is the right choice for your unique circumstances.

In the realm of mortgage options, the FHA program stands as a beacon of opportunity, empowering individuals and families to achieve the dream of owning a home.

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Robert Breiner. Licensed Loan Officer NMLS# 1199942 | BRE# 01960372 Golden Bear Capital Inc. DBA Click Mortgage | 10174 Old Grove Road Suite 140​, San Diego, CA 92131​ | Phone: 888-440-3001 | Fax: 888-500-5815 Golden Bear Capital Inc. DBA Click Mortgage (NMLS# 284021) is licensed by the California Department of Business Oversight (CFL License# 603H185) and the California Bureau of Real Estate (License #01847011), Nevada Division of Mortgage Lending License #4043), Utah Division of Real Estate (License #6332409), Washington Department of Financial Institutions (CL-284021).

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