FHA loans offer benefits for variety of homebuyers

MAILBAG

December 07, 2003

Some readers point out that borrowers other than those who can afford only small down payments can benefit from Federal Housing Authority loans.

Other advantages include:

FHA requirements for homebuyer credit ratings are more flexible than those set by many lenders for non-FHA borrowers. Borrowers with FHA-insured loans are allowed to carry more debt than are those with privately insured loans.

The FHA allows homebuyers to use gifts from family members and grants from nonprofit organizations to make their entire down payment. Conventional lenders usually require homebuyers to pay a portion of the down payment from their own funds.

Although these advantages are important for some borrowers, those eligible for conventional financing usually will save money by avoiding FHA mortgage insurance premiums.

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