FHA hub
How an FHA loan works
A regular loan from a regular lender, with a government guarantee behind it.
Who does what
You apply with a lender, such as a bank, credit union or mortgage company. The lender makes the loan. The Federal Housing Administration, part of HUD, insures it. If a borrower stops paying, the insurance repays the lender, not you.
Why that helps a buyer
Because the lender is protected, it can accept a smaller down payment and a wider range of credit histories than many other loans. Each lender still sets its own standards on top of FHA's.
Where the rules live
HUD publishes the rules in a guide called Handbook 4000.1. Lenders follow it. You do not need to read all of it, but you can.
More FHA topics
- Down payment and creditThe two things most buyers ask about first.
- Mortgage insurance (MIP)The cost that pays for the government's guarantee.
- Loan limitsFHA caps the size of a loan. The cap depends on the county.
- The home has to pass tooFHA looks at the house, not only at the buyer.
- Steps from search to keysThe order most FHA buyers follow.
Educational only. AskResi is not a lender.