 TITLE: What Is an FHA Loan? CONTENT: What to Consider Before Applying for an FHA Loan\n------------------------------------------------\nBe aware that you can't use an FHA loan for every type of property. You can't use one to buy fixer-uppers or certain foreclosures, and there are strict requirements for condos. Additionally, the property has to be your primary residence, so it can't be used on an investment property. The home you buy with an FHA loan must also meet strict government appraisal standards.\nAlso, keep in mind that some sellers might avoid buyers who use FHA loans. That's because some sellers assume that FHA borrowers have financial issues and that the transaction may not pan out, or that the buyer won't be interested in paying for any repairs. To make yourself competitive with non-FHA borrowers, you could make a full-price offer, or offer to buy the house as-is (though, of course, that carries its own risks).\nIt's also important to recognize that while scoring a low down payment is a huge perk for someone with minimal savings, it also has a drawback: You'll pay more interest over the life of the loan since you're starting off with so little equity in the home. On the other hand, the less you have to borrow, the more of your payment that will go toward the principal and allow you to build equity in the home faster—so you might want to put down more than the minimum down payment if you can. END