The beginning …
First, what does FHA even mean? The name comes from the “Federal Housing Administration,” who are the originators of this loan. It was introduced during the Great Depression due to the sheer amount of defaults and foreclosures that were happening. Because these loans were insured by the government, it reduced the risk to lenders which, in turn, gave the housing market a lot more life, especially for low-income individuals. Fast forward to the present day, and these loans still hold true.
Mortgage insurance is required. It ensures the lender in the case of a borrower defaulting on a loan. There are two types of mortgage insurance premiums:
Minimum credit score is 620 However, if you meet other compensating factors defined in our credit policies, the required credit score can go as low as 580. Don’t have a credit score? Sometimes that can be circumvented. We’d look at things like payment history on various bills and rental history.