FHA Financing: Advantages of FHA Loans for Condos

FHA loans—or the Federal Housing Administration-insured loans—are one of the most popular and sought-after mortgage options in the market, and they can also be used to purchase condos. These loans can provide some major advantages to potential condo buyers and, even though the FHA has some quite specific requirements for condos that qualify for financing through these loans, there are some undeniable benefits to consider.

1. Lower down payment: FHA loans require smaller down payments than other mortgage options, typically around 3.5%. This makes FHA loans especially attractive for first-time home buyers who may not have saved up enough for a bigger down payment.

2. Credit Score Flexibility: Because FHA loans are government-insured, lenders may allow buyers with less than perfect credit to qualify. Though the exact credit score requirement varies by lender, most require scores in at least the mid 500s.

3. Debt-to-Income Ratio Flexibility: Along with lower credit score requirements, lenders typically also allow buyers to have a higher debt-to-income ratio than other forms of mortgages. This means