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The FHA insures mortgages that are issued by banks, non-banks, credit unions, and other lenders. The main reason for this insurance is to protect lenders if there is a default on the loan. Because of this setup, FHA lenders can offer more favorable terms to borrowers who would otherwise have more difficulty qualifying for a home loan.
One of the main reasons for an FHA loan is to help anyone who might not qualify for a conventional mortgage buy a home. There are also many benefits that come with an FHA loan, from competitive FHA rates to low down payment requirements.
Where to find FHA-approved condos
It is important to check whether your dream condo is FHA-approved before you purchase it. The easiest way to find where FHA-approved condos are located is by visiting the US Department of Housing and Urban Development’s website. When conducting your research, it is also important to account for condo requirements and fees.
The steps to securing an FHA-approved condo are similar to applying for any kind of home loan, which include:
- Credit score. Ensure your credit score is as high as possible prior to getting preapproval.
- Down payment. Even if you are only able to put down the 3.5% minimum, it is important to save for a down payment.
- Affordability. As with any significant purchase that has long-term effects, it is also important to only buy what you can afford.
If you want to secure an FHA-approved condo, it is a good idea to work with a real estate agent who is knowledgeable about your area and is also well-versed in FHA-approval guidelines.
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