FHA loan
A government-backed loan insured by the Federal Housing Administration. Allows lower down payments and lower credit scores than conventional. Carries mortgage insurance for most of the life of the loan.
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See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
An FHA buyer brings a small down payment and an appraisal with property standards attached. Peeling paint, a missing handrail or a bad roof can become a condition of the loan, and the seller often ends up fixing it.
Part 2 of 4
A simple example
An FHA buyer at $300,000 with 3.5% down. The appraiser notes peeling exterior paint on the 1970 garage and flags it.
| What the appraiser finds | What follows |
|---|---|
| Peeling paint on a pre-1978 home | Scraped and painted before closing, usually by the seller |
| Value at or above the price, no conditions | The loan proceeds like any other |
| Value under the price | The FHA appraisal sticks with the home for months, for any FHA buyer |
FHA financing opens the door to more buyers and brings a short list of conditions with it.
Part 3 of 4
What people get wrong
That FHA buyers are weak buyers. They are approved buyers with a specific program, and their loans close every day.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines fha loan in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.