The FHA loan program is a product of the Federal Housing Administration, which is an agency within the U.S. Department of Housing and Urban Development (HUD).
Among the program's most widely-used features is its minimum downpayment requirement of just 3.5 percent. As compared to other loan types such as a conventional mortgage, mortgage rates for an FHA loan can be as much as 25 basis points (0.25%) lower; and for borrowers whose credit scores aren't "perfect", the difference can be even greater.
Other than lower rates and a small downpayment there are other reasons why a home buyer may want to finance a home via the FHA. FHA loans are assumable. FHA has their 203(k) program, which is similar to a "construction loan". Via the 203(k), consumers can borrow the costs of a home improvement project instead of paying for it with cash.
The FHA Streamline Refinance program is a service provided to all FHA-backed homeowners. Via the program, so long as a homeowner's been making monthly payments on time; and, so long as those payments are dropping by five percent or more, the FHA will allow a no-verification refinance to the current FHA mortgage rates.
3.5% Down payment
580 FICO up to 96.5% LTV
No restrictions on gift funds
Generally lower rate than conventional mortgage
Programs: 15, 20, 25 and 30 year
Manufactured housing property types may be eligible
At Mortgage Explorers, We Say Yes! | Okemos Mortgage Broker