FHA loans: Pros, cons, and how to qualify - Business Insider

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To qualify for a Federal Housing Administration loan, you need a 3.5% down payment, 580 credit score, and 43% debt-to-income ratio.The FHA offers several types of home loans, including traditional mortgages, loans for home improvements, and loans for building a home. FHA loans can be great tools for buying a home with a less-than-perfect financial profile, but be sure you're comfortable with the limitations and mortgage insurance costs.. This type of mortgage is especially useful for first-time homebuyers who may not have had time to save a ton for a down payment or pay down all their debts yet.is not backed by a government agency, and it's a little harder to get than a government-backed loan.

Your loan will be backed by the FHA, but you don't apply through the FHA. You'll visit a regular mortgage lender that approves FHA loans. A lender's website should specify whether it issues FHA loans.Actually, you can apply for an FHA loan with a credit score as low as 500. But if your credit score is between 500 and 579, then you'll need at least 10% for a down payment.Credit score and down payment.

If your credit score is at least 580, then you'll need 3.5% for a down payment. You'll need 10% if your score is between 500 and 579.

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