FHA lending is a great alternative loan for someone with a low score but no recent bad credit in the past 12 months. Even someone with as low as a 580 credit score and sometimes even lower (with supporting circumstances) can qualify for this loan.

There are many perks to qualifying for an FHA loan. You can borrower up to 97% loan to value and the remaining 3% can be 100% gifted from a family member. In buying a home with this program the seller can contribute up to 6% of the purchase price towards the closing costs.

Afraid you haven’t saved enough money to show reserves in the bank? Not to worry but another wonderful perk to the FHA loan. There is NO reserve requirement for qualification.

Are you self-employed or retired? Don’t worry about that either. FHA accepts these for income qualification as well. They use standard lending guidelines for calculating and treat the income as any other loan.

One other noted perk… There is no pre-payment penalty should you decide to pay the loan off early.