In other words, you have a better chance of getting an FHA loan sooner than a conventional loan after a negative credit event.
3. Low down payment
For an FHA loan, you will need less time to save for a down payment on a home than you once thought, because they are designed to help borrowers who do not have 20% to put down. This is especially beneficial in more expensive markets where higher down payments present a barrier to homeownership.
Keep in mind, however, that the down payment for an FHA loan is dependent on credit score. For instance, if you have a credit score under 580, you will have to make a higher down payment, like 10%. If your credit score is 580 or higher, your down payment will likely be 3.5%. In the latter case, this means a down payment of $10,500 on a $300,000 single-family home.
4. More lenient gift funds
You can get help to pay your down payment if you do not have the money. For an FHA loan, you can get a gift fund from your family, close friends, employer, union, or government down payment assistance program. For conventional loans, on the other hand, rules surrounding gift funds are stricter. (Typically, conventional loans allow gift funds from relatives only.)
Source: mpamag.com