FHA loans offer very competitive rates. They are generally similar to, if not lower than, rates on conventional loans. Lenders can offer these great rates because the loans are insured by the Federal government. This means that any risk involved with your loan is taken on by the FHA, not the lender. This allows you to get lower rates for the following loans:

• Purchase loan with less than 20% down payment
• Cash out refinance loans up to 95% of the value of your home
• If your credit is less than perfect
• If you need a co-signer
• Refinance of a current FHA loan
• Purchase or refinance of a 3 or 4 unit property

FHA can offer better rates for these and other loans because the lender does not absorb the risk. Therefore, they do not have to pass that risk along to you. In fact, Fannie Mae, the backer of most conventional loans, has recently announced new rate adjustments for borrowers with credit scores below 680. FHA does not have these adjustments.

If you fall into any of the above categories, or have less than stellar credit, you should see what an FHA loan could do for you.

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