Federal Housing Administration loans.

FHA loans are loans insured by Federal Housing Administrations of United States of America. FHA loans are not issued by FHA, but only insured by FHA.

In simple speak, when you can not qualify for a conventional bank loan, your second best choice is an FHA loan. FHA loans are issued by lenders (banks) qualified by FHA. Banks use their own money to fund these loans, FHA only insures them. In case the borrower defaults (stops paying) the bank losses are paid back by the FHA insurance.

Here it is how this works in real life. Lets say I can not qualify for a conventional bank loan, but as my luck has it, the bank where I applied for a loan is a qualified FHA lender. This bank can give me a loan which will be insured by FHA, if I pass all the strict requirements for this program. Not only I have to fit, the home I am buying has to "qualify" too. FHA has requirements for the homes, mainly it is the price of the home I am trying to purchase.

FHA requirements for borrowers and for homes change pretty frequently as the administration tries to keep up with the changing market conditions. At the time of writing this, the price limit for the home to qualify for FHA loan in the state of Georgia is in the low three hundred thousand dollars.

To find out if you qualify for a FHA loan speak to a mortgage broker, who specializes in FHA programs or check out some of our homes. Our experience shows that it takes 3 to 6 months of credit cleanup and saving for a down payment to qualify for the FHA loan. When FHA loan is used in combination with Rent to Own, you can enjoy home ownership immediately and work towards qualifying for FHA loan in the future.