The Federal Housing Administration insures your home loan. Their lenient requirements make them an excellent option for first-time buyers or borrowers with low credit scores. 

But before you start processing yours, though, Pennix Mortgage, one of the best mortgage lenders in Cumming, GA, shares  what you need to know about FHA loans: 

1. All Borrowers Can Try to Apply

First-time home buyers must have poor credit to qualify for an FHA loan. If you’ve had a bankruptcy, foreclosure, or short sale, you can apply. As long as you haven’t had any of those in the past three years, nothing is stopping you from trying.

Even if you did have a blemish on your credit, you could still get an FHA loan. They will check your three credit reports and calculate your debt-to-income ratio. As long as your credit looks good and your debt is manageable, you’re golden.

Unlike a conventional loan, the FHA has no minimum credit score requirements. You can apply for an FHA loan with any score if you meet their minimal debt-to-income ratio.

2. The FHA Has Low Down Payment Requirements

The FHA will let you borrow up to 96.5% of the home’s value for first-time homebuyers with decent credit. That’s super low! 

The housing bust left many borrowers with little money to put down on their first homes. Their inability to make a down payment is what’s slowing the recovery.

The FHA has an answer. They’re willing to lend their own money to first-time home buyers, even if they can’t afford it.

If you’re ready to get one of those loans, check out our list of online lenders that specialize in FHA loans.

3. You Can Borrow up to $625K

If you’re ready for a jumbo loan, the FHA has you covered. They don’t restrict the size of your loan as long as you live in a rural area. In most cases, the FHA will let you borrow up to $625,000.

However, there are a few areas where the FHA won’t back you up. If you live in a foreign country or a city with over 500,000, their loan caps are lower. 

4. There’s No Guarantor Required

You don’t have to have someone else guarantee your FHA loan. Unlike a conventional loan, the FHA isn’t looking for a co-signer. That means you can get all the money you need without having to rely on someone else’s income.

If you’ve got poor credit, this doesn’t mean your FHA loan will be easy. To qualify, you have to have a stable employment history and a sizable down payment. They’re more strict with the FHA than the other government loans.

5. There Are No Prepayment Penalties

If you’re ready to pay off your FHA loan, you can do it without penalty. The FHA doesn’t punish you for paying off your loan early.

You’re allowed to prepay your loan, but it’s only available on a 30-year fixed-rate loan. If you want to pay off your loan early, you’ll need to refinance your loan into the 30-year fixed rate.


The Federal Housing Administration was established during the Great Depression. Their goal is to help every American achieve the dream of homeownership. That’s why the FHA has a lenient credit policy and low down payment requirements to achieve that goal. They’ll even throw in some money to help you pay for your down payment.

Getting an FHA-insured loan can make your dream a reality. All it takes is a little research and hard work to secure one for yourself.

The FHA loan is easy to qualify for, and it offers tons of great perks. If you’re ready to apply for an FHA loan, Pennix Mortgage is here to help you. We are among the most trusted lending companies in Cumming, GA that has been providing clients with the best rates for many years now. Contact us today to know more about our loan offers!