The Federal Housing Administration (FHA) does not make loans. It simply insures loans. What’s the benefit? This insurance minimizes the default risk lenders face when buyers put 20 percent or lower as a down payment on a house. This works in both the buyer and lender’s advantage.

FHA loans are perfect for people who have:

Filed for bankruptcy. Keep in mind that you have to wait two years before you can obtain an FHA loan, provided you have maintained good credit and your debts have been released.

Less than perfect credit.

Foreclosed on a home or business. Similar to bankruptcy, you must wait two years after the foreclosure’s final date and keep your credit in excellent shape. Then, an FHA loan may be an available option.

The first step to obtaining an FHA loan is to contact a private lender and inquire about FHA advantages. These types of loans are available to anyone; however, they are generally used by first-time homebuyers and low-income families.

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