For those who have conventional loans, switching to FHA loans could be beneficial for a wide-range of reasons. A loan that is supported by the Federal Housing Administration (FHA) can offer guidelines and terms that are more desirable than a conventional loan or mortgage. The FHA is not the direct source of the loan, but a FHA loan guarantees the loan amount in the borrower's name to the lender. The Federal Housing Administration determines a loan amount based on the average property value in the area and if a buyer needs a specific loan for a mobile home or condominium.
FHA Loans Are Beneficial to Those with Damaged Credit
For those with a blemished credit history, a FHA loan is more forgiving than a conventional loan. If an individual has faced financial trouble in the past, then he or she may still be able to qualify for a FHA loan. Furthermore, those who have declared bankruptcy will be able to qualify for a FHA loan only two to three years after the filing date if good credit is maintained.
FHA Loans are Available for Those who Have Faced Foreclosure
If an individual has faced foreclosure in the past two to three years, then he or she may be able to obtain a FHA loan. However, in order to obtain a FHA loan after foreclosure, an individual must have maintained excellent credit since the date of the foreclosure.
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