The Federal Housing Administration’s home loan program makes it less difficult to gain approval for a mortgage, while decreasing the upfront expense for home buyers. The program accomplishes this by providing the lender with insurance against the borrower’s potential failure to repay the loan.

Borrowers with problematic credit histories can still qualify for an FHA home loan, according to HUD.gov. The program also only requires a three percent down payment, offers decreased closing costs, and sometimes makes it possible to receive a lower interest rate. The maximum loan amount the administration is willing to insure varies from one locality to another; these are generally higher in regions where real estate is more expensive.

The program includes loans intended for people who are purchasing their first home, buying “fixer-uppers”, making energy efficiency improvements to a house, or taking out a mortgage on a mobile/manufactured home. The housing administration offers a Reverse Mortgage program for home owners older than 61 as well. However, most U.S. citizens are potentially eligible for an FHA loan. A tool on the HUD/FHA web site enables visitors to search for affiliated lending institutions in their area.

The “FHA Resource Center” on HUD.gov includes a useful feature allowing users to ask questions and receive answers about the loan program. It indicates that in some states homes HUD has foreclosed upon can be purchased with only a one-hundred dollar down payment if the new mortgage is also insured by the housing administration. Also, some military veterans are not required to make as large a down payment on loans which are insured by the FHA.

Another program the government offers insures mortgages (including repair costs) on buildings in “older, declining” parts of cities. According to FHA.gov, this option is limited to costs of $18-21 thousand dollars, depending upon property values in the area. A wide variety of other FHA subprograms exist, including options for people purchasing property on Native American reservations, and teachers moving to localities designated as “revitalization areas.”

Overall, the FHA home loan program makes it possible for people who (due to lack of available funds and/or low credit scores) otherwise wouldn’t be able to purchase a home, or would have to accept a less desirable mortgage. Borrowers can contact one of the FHA affiliated lenders to help determine if they are eligible for this program.