Tell me about FHA loans?

You really need to sit with a lender and see what programs are available to you. You may qualify for special first time homebuyer status and therefore perhaps lower interest rates. FHA is a government program that basically co-signs for you to buy a home provided you meet credit criteria like bankruptcy (if applicable) is 2+ yrs old and no outstanding unpaid debt in collections, no negative credit for min 1 yr., seller can pay all closing and prepaid costs, down payment can be gift funds from any legitimate source provided they are not required to be repaid, or it can be funds borrowed against an asset you already own say a car. In some cases such as a new home you may get some credit for painting and sowing the grass seed in the yard.

Again the best thing to do is sit with a loan officer at a bank and only with a lender that has "in-house underwriting". Get a good faith estimate from a couple lenders and see what the fees are as the program itself is regulated from the interest rate perspective it is determined by FHA, but the fees are not regulated per se.

***It is not uncommon to couple FHA with another program that is designed to assist people in becoming homeowners. It has worked to the advantage of this country to have a high number of homeowners- in fact the highest in the world- that numerous programs are available to assist with the down payment or closing assistance from state and local government programs as well.

You don't have to go FHA to do this. If you have good enough credit you can get 100% convential financing and the closing costs and prepaids can be paid by the seller. This is the same way it is done with FHA but the rate is generally an eighth to quarter high with FHA.

Hud homes are generally FHA loans. Could check the Hud houses for sale in your state and the real estate person involved. Find a person that will work with you in being as creative as possible on financing, repairs,etc. I picked one up in NJ in 2000, fixed it up a little and sold it a year later. You may have to come up with at least the closing costs and consider some repairs that are common with these type of loans. Real estate people are getting hungry. Sales are slowing a little and that will help. May want to wait just a little bit for prices to drop a little more. Good luck and be careful.

It's true that sometimes you can put the closing costs in the end if the house will appraise for the higher value. There are other programs like ameridream that do similar things. Any good lender should help you with all your options.One other thing is PMI insurance which helps with the down payment.