SOURCE: Mortgage News Feed
I agree that FHA has increased their rates to a point that the program is less attractive. However there are two reasons the program is still an attractive alternative. FHA lending standards can be less restrictive than conventional alternatives. It is interesting that the guidelines may not read much differently, but in reality some lenders will offer a lower credit score on FHA vs. conventional. Why? For one thing, FHA loans are 100% insured, which is part of the reason that the insurance costs more as compared to conventional insurance which covers the lender typically down to 75%.
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