If you have too much debt to qualify for a conventional mortgage, less than stellar credit scores or not much cash for a down payment, consider buying a home with an FHA loan.<\/p>\n
The Federal Housing Administration, a division of the Department of Housing and Urban Development, was created 80 years ago to help low- and moderate-income families borrow the money they need to buy a home.<\/p>\n
The FHA doesn’t actually make home loans. It guarantees that lenders will be repaid if you default on the loan.<\/p>\n
That guarantee allows banks and mortgage companies to work with borrowers who might not be able to qualify for conventional home loans and at surprisingly competitive interest rates.<\/p>\n
The majority of lenders make these mortgages, and about one of every six new home loans is backed by the FHA, according to Ellie Mae, a California-based mortgage technology firm.<\/p>\n
There are serious limits on how much you can borrow with an FHA loan for a single-family home \u2014 up to $271,050 for single-family homes in most parts of the country or as much as $625,500 in high-cost cities such as New York and San Francisco.<\/p>\n
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