What is an FHA loan?

An FHA loan is a mortgage loan insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD). FHA loans are available in South Dakota and feature lower down payment requirements than conventional loans. FHA loans are typically easier to qualify for than conventional home loans due to their lower credit score requirements and down payment requirements. In order to qualify for an FHA loan, borrowers will need to have a valid Social Security number, be a legal U.S. citizen or a permanent resident, and be able to provide proof of employment and income. In addition, borrowers must have a minimum credit score of 580 and no more than two 30-day late payments on major credit accounts over the last year. The main benefits of an FHA loan are that it offers lower down payments than traditional conventional loans, allows for gift funds to be used as a down payment or towards closing costs, and may be able to help qualified applicants with special circumstances such as bankruptcy or foreclosure. Overall, FHA loans offer an attractive option for first-time homebuyers in South Dakota due to their low down payment requirements and flexible credit requirements. However, it is important to shop around and compare the terms and rates of different loan products before committing to a loan to ensure a good fit for your individual financial goals.

Related FAQs

What is a home inspection and why should I get one?
How can I find a lawyer who specializes in residential real estate law?
What is a title search and why should I do one?
What is the difference between a buyer’s and a seller’s agent?
What is a lease option?
What is the difference between an owner-financed loan and a conventional loan?
What is the difference between a title search and a title insurance policy?
What is the difference between a Listing Agreement and a Buyer Representation Agreement?
What happens if I breach a contract?
What is the difference between a real estate attorney and a real estate agent?

What is an FHA loan?

Related FAQs

Related Blog Posts