For many of us, these are tough economic times. Where once it was no problem to get financing to buy new a condo, today either because of shaky unemployment status or an almost nonexistent savings account to use as a down payment, many people are unable to get approval for a mortgage. If you live in the United States and are faced with this problem, you have more options than just continuing to rent forever. You could apply for a home loan from the Federal Housing Administration.

The Federal government has long since recognized that home ownership is much more financially healthy than renting for long periods of time, as rent payments disappear with no long term benefits for the renter but mortgage payments eventually result in full ownership of the property, free and clear. As such, they have put into place several programs to help first time home buyers and home buyers whose credit or savings were damaged by the recession and sub-prime mortgage crisis.

How FHA loans work is that the government doesn't actually lend you the money itself. Rather, it offers to act as insurance for you in getting a loan from a private lender. With the government there to back you up if you fall behind, banks are more likely to take a chance on funding your purchase of real estate. Then if you default on your loan, it will be repaid by the FHA. This service doesn't come free, however. You will have to pay a 1% premium upfront and make monthly contributions.

Because of this, FHA loans are often more expensive in the long run than regular mortgages, so if you can qualify for a regular mortgage to buy your home it is probably better to do so. FHA loans are also very modest. You can only get one to buy a small to medium house in your area, not a mansion or luxury condo. However FHA loans let you buy a home with as little as 3% available as a down payment and allow you to make extra payments whenever you like without a penalty. They'll even be more understanding if you fall on hard times.

So who can qualify for an FHA insured home loan? Well, if you're trying to purchase London lofts for sale for example, you won't qualify. This program is only for Americans looking to buy properties to live in themselves in their home cities. Beyond that you have to have a debt to income ratio of 55% or better and a relatively okay credit score. There are no limits on income, only limits on how much you can borrow, which are set according to the average housing prices in the region.

We have put together a small list of links where you can go to read more information about the FHA home loan program.

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