FHA Loan

An FHA loan is a Federal Housing Administration loan issued by an FHA-approved lender (generally a bank) and is insured by the FHA. FHA loans are issued to low-to-moderate income borrowers. These borrowers are unlikely to get approved by a bank. To help the borrower get a home loan, the FHA steps to reduce some of the bank's risk. The bank ultimately determines if the borrower is qualified for the loan. Down payments on an FHA loan are smaller than those for a conventional mortgage. Borrower credit scores are also lower than those found on conventional mortgages.

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