May 17, 2022

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What Are The Benefits Of An FHA Loan?

Is Your Credit Report Hurting Your Chances At Loan Approval?

FHA home loans are for any financially qualified borrower. You don’t have to be a first-time homebuyer, and you don’t have to worry about income caps or household income limits when applying for an FHA mortgage.

And there are plenty of other FHA loan benefits, too.

Consumer Protections With AN FHA Loan

One important benefit and protection for the FHA borrower is an FHA requirement for a home to be approved for an FHA mortgage, it must have a remaining economic life for the full duration of the loan term.

That is important–what good is owning a home you cannot sell?

The home’s condition at closing time must be such that it is suitable to re-sell at any point during the mortgage. If the home’s basic condition would not support a remaining economic life for the full term of the loan as long as 30 years maximum, it would not be approved for an FHA home loan.

FHA Loans Have Low Down Payments

FHA mortgages require a down payment. That’s different than USDA mortgages or VA home loans.

FHA loans feature lower down payment requirements — compare the FHA maximum financing rules to certain conventional mortgages and you’ll find that an FHA mortgage requires only 3.5% down unless your FICO scores don’t meet FHA minimums and lender requirements.

FHA loans also reinforce the low down payment requirement by allowing down payment assistance from approved sources.

FHA Mortgages For Multi-Unit Homes

FHA borrowers can apply to purchase property with as many as four units–this purchase is possible for those who financially qualify and who intend to live in at least one of the units as their home address.

FHA loans require occupancy, but you are free to occupy some of the units in the home and rent out the unused ones.

FHA Loans To Purchase, Build, Or Renovate

An FHA Single-Family home loan lets you buy a home, build one, or renovate existing property with a low down payment.

These loan options include the FHA One-Time Close mortgage loan, the FHA 203(k) Rehabilitation mortgage, and the standard FHA purchase loan for existing properties. You can also apply for an FHA mobile home loan.

Early Payoff, No Penalties

Do you believe early payoff refers only to paying off the mortgage over the full 15 or 30-year loan term? Dont forget about situations where you might wish to pay off early by refinancing the loan! Some conventional mortgages feature early payoff penalties.

FHA loans are required by law to be issued without such early payoff consequences.

Talk to a participating lender if you have questions about one or more of these aspects of the FHA Single-Family Home Loan program. Get your questions answered while you’re still in the planning stages–you will be very glad you did.

Bruce Reichstein - FHA News Author

By Bruce Reichstein

June 24, 2021

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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