One of the most important advantages of FHA loan is that the lender is not much worried about the FICO score of the borrower. For a person who is actually going to buy a home or refinance an existing mortgage, this will be wonderful news. The lender will not check the actual credit score; instead they will check how the borrower is repaying in the last few years. They will allow a maximum of two times of missed payments of any of the loans taken by the borrower over a period of 2 years. This means that the lenders are not worried about the past credit scores. They want to know the present situation of the borrower, whether he is financially stable or not.

The credit score shows the credit worthiness of a person and it will be based on the performance of the borrower over the last 7 years. Thus mistakes made by a person in loan repayments in the last 7 years will appear in the credit score. If a person had financial difficulties in the past but is financially stable for the last 2 years, will have a poor credit score, but will qualify for FHA loan. Thus this loan program is really advanced compared to many other programs. Most of the conventional banks will not offer loan in such conditions.

Another advantage is that the loan is with a very low interest rate; lower than the lowest rate offered by all the other lenders for a loan of 30 year period. A person shall have a valid social security number and be able to prove the income, in order to qualify for this loan. Moreover he has to make a down payment of 3% of the loan amount. If these conditions are satisfied one can easily avail FHA loan.

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