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If you have little or no money for a down payment, iffy credit and too many bills, an FHA loan could be what you need to buy a house.
The Federal Housing Administration, a part of the Department of Housing and Urban Development, was created 70 years ago to help first-time buyers, especially low-to-moderate income families and minorities, get the financing they need.
You can apply for an FHA-backed loan from most banks and mortgage companies. Just click here to find all of the FHA approved lenders in your area.
Since repayment is guaranteed by the federal government, the lender knows it will not lose money on the deal. That allows the bank or mortgage company to offer competitive rates on a loan that's easier to qualify for than a conventional home loan.
FHA loans aren't as popular as the once were, primarily because the limits on how much you can borrow didn't keep up with soaring home prices.
As a result, the FHA guaranteed just 425,000 purchases last year, down from 1.3 million homes in 2003. The decline is even more dramatic in states with the highest home prices. Only 4,443 Californians took out FHA loans last year, down from 100,000 in 2003.
But with a wave of foreclosures making alternatives such as subprime loans and 100% financing more difficult to obtain, every first-time buyer should at least consider an FHA loan.
Here are the ways you could benefit from the government's help:
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