FHA loans are insured against default by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. These types of loans allow people to buy a home with as little as 3.5% down, while other loans might not allow such a low down payment.
Almost anybody can get an FHA loan. There are no income limits, but there are limits on how much you can borrow. In general, you’re limited to median home prices in your area. To find the limits in your region, visit HUD’s Website. To qualify for an FHA loan, you’ll need to have reasonable debt to income ratios. You don’t need perfect credit but you will need to have a credit score of at least 620.