Federal Housing Administration
The federal housing administration (FHA) is like a grown-up that helps people buy their own homes. It's part of the government and its job is to make sure that people who might not normally be able to get a home loan can still buy a home.
When you buy a house, you usually need to put some money down and then borrow the rest from a bank or other financial institution. Sometimes, people don't have enough money to put down, or their credit score isn't high enough, which makes it harder to get approved for a loan.
That's where the FHA comes in. They guarantee loans for people who might not otherwise be able to get them. This means that if someone with an FHA-backed loan isn't able to pay back the bank, the government will step in and pay the difference, so the bank doesn't lose too much money.
The FHA has certain rules that banks have to follow when they give out these loans. For example, the FHA sets the minimum credit score borrowers need to qualify for a loan, and lenders have to follow those rules if they want the government to back their loans.
Overall, the FHA helps make it possible for more people to buy homes, even if they don't have perfect credit or a lot of money saved up.
When you buy a house, you usually need to put some money down and then borrow the rest from a bank or other financial institution. Sometimes, people don't have enough money to put down, or their credit score isn't high enough, which makes it harder to get approved for a loan.
That's where the FHA comes in. They guarantee loans for people who might not otherwise be able to get them. This means that if someone with an FHA-backed loan isn't able to pay back the bank, the government will step in and pay the difference, so the bank doesn't lose too much money.
The FHA has certain rules that banks have to follow when they give out these loans. For example, the FHA sets the minimum credit score borrowers need to qualify for a loan, and lenders have to follow those rules if they want the government to back their loans.
Overall, the FHA helps make it possible for more people to buy homes, even if they don't have perfect credit or a lot of money saved up.