FHA Loan
FHA Loans are government-backed mortgages designed for low-to-moderate income borrowers who may have lower credit scores. They require a lower minimum down payment and are more accessible than conventional loans.

Benefits
- Competitive interest rates.
- Various term lengths available.
- Lower private mortgage insurance (PMI) costs compared to FHA loans.
- No PMI with a 20% down payment.
- Flexibility in property type, including second homes and investment properties.
Eligibility/Requirements
- Credit score of 620 or higher.
- Stable income and employment history.
- Down payment of at least 3% (higher down payments lower PMI costs).
- Debt-to-income ratio (DTI) below 45%.
Here’s an example
Jane, a teacher with a credit score of 650, is looking to buy a new home. She has saved enough for a 5% down payment. She opts for a Conventional Loan with Hometown Mortgage, securing a 30-year mortgage with a competitive interest rate. Her PMI is relatively low due to her credit score and down payment.