You do not have to build castles in the air anymore. If you have been dreaming about owning your own home, and are worried about your low credit rating or non-availability of funds for a down payment, FHA loans are the ideal solution for you.

Helping the first time homeowners realize their dreams is FHA, the Federal Housing Administration, offering mortgages that are insured, for 15 or 30 year terms with fixed or adjustable interest rates. This means that if borrowers default on the loan, the mortgage insurance paid by them protects the lender from a loss. The FHA will pay the balance of the loan and take ownership of the property. Granting down payments of 3.5% for credit scores of 580 and above, and 10% for credit scores between 500 and 579, borrowers are instructed to pay Mortgage Insurance Premiums that are a security for lenders in the event of a loan default. FHA loan guidelines are extensive and include many conditions that need to be fulfilled.

First, like any lender would expect, the basic criteria is that the borrower must be over 18 years of age, a citizen or legal resident of the U.S. with a valid social security number, and must be employed. But just a job would not suffice, a proof of steady employment history is a necessity, as is the minimum down payment of 3.5% that would ensure maximum financing. Establishing that the borrower handles money responsibly is important, as is a good credit after a foreclosure or bankruptcy period. The new home in consideration must be a primary residence for the borrower, must have a property evaluation from an FHA approved appraiser, along with adhering to the minimum standards of appraisal. A borrowers front end ration between 31-40% of the gross income they earn and a back-end ration between 43-50% of the gross income is also a prerequisite.

The Federal Housing Administration makes homes affordable for everyone. If you follow the FHA guidelines and believe the loan qualifications are suited for you, look no further.