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Mortgage options refer to the various choices available to homebuyers when selecting a loan to finance their property purchase.


An FHA loan is a government-backed mortgage loan that allows you to buy a home with looser financial requirements. You may qualify for an FHA loan if you have debt or a lower credit score. You might even be able to get an FHA loan with a bankruptcy or other financial issue on your record.

What Is a Federal Housing Administration (FHA) Loan?

A Federal Housing Administration (FHA) loan is a home mortgage that is insured by the government and issued by a bank or other lender that the agency approves. FHA loans require a lower minimum down payment than many conventional loans, and applicants may have lower credit scores than are usually needed. The FHA loan is designed to help low- to moderate-income families attain homeownership. As a result, they are particularly popular with first-time homebuyers.

Benefits of FHA Mortgage Loans

Looking to purchase a house in Los Angeles or anywhere in California but can't apply for a traditional mortgage? FHA loan is an excellent option. The guidelines and requirements for an FHA mortgage are much more lenient: a low FICO score and small down payment are OK.

  • Perfect for the First-Time Home Buyers: This is an ideal mortgage loan for first-time home buyers. These loans are popular among first-time buyers because of low down payments and flexible qualifying guidelines.
  • Low-Interest Rates: FHA loans have lower interest rates. This happens because the lender takes less risk.
  • Finances for Home Repairs: Need some extra funds to repair the house? The FHA has a particular loan for that. It is not based on the home's current value but on the projected one.
  • Gift Fund as a Downpayment: You can use a gift fund as 100% of a down payment on your house (for primary residences only).

How to qualify for an FHA loan

To be eligible for an FHA loan, borrowers must meet the following lending guidelines:

  • Have a FICO score of 500 to 579 with 10 percent down or a FICO score of 580 or higher with 3.5 percent down.
  • Have verifiable employment history for the last two years.
  • Have verifiable income through pay stubs, federal tax returns, and bank statements.
  • Use the loan to finance a primary residence.
  • Ensure the property is appraised by an FHA-approved appraiser and meets HUD guidelines.
  • Have a front-end debt ratio (monthly mortgage payments) of no more than 31 percent of gross monthly income.
  • Have a back-end debt ratio (mortgage plus all monthly debt payments) of no more than 43 percent of gross monthly income (lenders could allow a ratio up to 50 percent, in some cases).
  • Wait for one to two years before applying for the loan after bankruptcy or three years after foreclosure (lenders might make exceptions on these waiting periods for borrowers with extenuating circumstances).

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First-Time Home Buyers
Multi-Unit Properties
Loan Eligibility
Insurance Requirements
Down Payments

First-Time Home Buyers

Risk Factor

FHA loans are only for first-time home buyers.


FHA loans are for everyone! They are a wonderful option for first-time buyers and very popular among them.

Multi-Unit Properties

Risk Factor

You can’t buy a multi-unit property with an FHA loan.


You can, in fact, buy a multi-unit property with an FHA loan. The caveat is that you need to occupy one of the units as your primary residence.

Loan Eligibility

Risk Factor

FHA loans are harder to qualify for.


This is false. In fact, it's quite the opposite. FHA loans are meant to provide homebuyers with less than perfect credit scores and/or minimal down payment funds an opportunity to purchase a home.

Insurance Requirements

Risk Factor

FHA loans do not require insurance.


FHA loans DO require insurance. There are 2 types of insurance that are held on every FHA loan. There is an upfront premium paid on the loan amount and an annual premium, paid in monthly installments by the buyer.

Down Payments

Risk Factor

FHA loans require the same down payment as conventional loans.


False! The minimum required down payment for conventional loans is 5% for repeat buyers whereas FHA loans can require as little as 3.5%.

Equity 123 Lending

Equity 123 Lending is a licensed mortgage broker.

All loans originated by Equity 123 Lending are funded by third party lenders. Equity 123 Lending INC, and Equity 123 Lending, LLC. are authorized to do business as “Equity 123 Lending” in certain states.

Equity 123 Lending is an equal housing lender.
cedric@equity123lending.com949 306-6602
22512 Aliso Park Drive
Lake Forest, California 92630
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The content provided within this website is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply. Mortgage loans may be arranged through third party providers.
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