FHA Loans – All That You Need To Know

FHA Loans

Have you made sure that an FHA loan is the right loan for you?

Whether you have or not, it is important that you know what an FHA loan is, which is why we are here to break it all down for you. There is no need to go sifting around the Internet for information on FHA loans, as we have answers to all of the questions you might have right here!

What is an FHA Loan?

FHA loans are mortgage loans that are insured through the Federal Housing Administration. These loans are extremely popular among those buying homes for the first time, as well as those who have poor credit or little savings.

You can acquire an FHA loan with a minimum down payment of 3.5% and you must have a credit score of 580 or higher.

The FHA will insure mortgages that are issued by a variety of different lenders, including credit unions and banks. The insurance is there due to defaults, as it helps to protect lenders while they offer borrowers favorable terms.

Who Is The Federal Housing Administration?

The Federal Housing Administration has been around since 1965, though it actually began unfolding in the early 1930s as a New Deal component. The National Housing Act came around in 1934 to help make homeownership more affordable while helping with the overflow of foreclosures at the time.

The FHA established the standard 20% down payment, as they were able to issue mortgages for 80% of the overall value of a home.

FHA Vs. Conventional Loan

FHA loans are more popular than conventional loans, as they are much easier to qualify for. This is because conventional loans are not insured by the federal government. Those who have lower credit scores have an easier time qualifying for an FHA loan, as their standards are far more liberal.

It is important to note that FHA loans may involve a few closing costs that conventional loans will not require.

Pros and Cons of FHA Loans


  • FHA loans can be acquired with lower credit scores
  • Only require 3.5% minimum down payments
  • Allow for debt-to-income ratio as high as 50%


  • Strict health and safety standards for properties
  • The loan amount cannot be greater than the standard area limit (no jumbo loans)

Getting an FHA Loan

It is important to note that while the FHA has standard requirements, the requirements of FHA-approved mortgage brokers in Denver, CO can vary. Fees and interest rates may also vary based on the lender that you choose. This is why we always recommend doing your research to find the best rates possible!

Our goal is to make the home buying process as easy as possible. We want to make sure that our clients have an understanding of their loans, rates, etc.

If you’re ready to take the leap and buy that dream home, then make sure to get in contact with us here at NESWork.