How Do FHA/Non-FHA Home Loans Compare?

Many first time home buyers try to understand what the difference between FHA and non-FHA loan programs are. While both can ultimately help you achieve the goal of getting the house that you want, they go about it in different ways. They have some similarities and some differences as well. Here are the things that you need to know about FHA and non-FHA loan programs.

FHA Loans

  • Lowest down payments- You can get down payments as low as 3.5% of the loan value.
  • Government insured- The government stands behind the loans and insures the loan for the lender.
  • Easy approval- Since the loans are insured by the government, you are much more likely to be approved for this type of loan even with questionable credit.

Non-FHA Loans

  • Lower fees- You can sometimes find lower fees. This can save you a substantial amount of money if you have the right credit history.
  • Not government insured- Heavy emphasis on your personal credit history and income. 
  • More options- With a non-FHA loan, you will have many different loan programs to pick from. FHA loans are usually a little more limited in their scope.