FHA Loan

Insured by the Federal Housing Administration, FHA loans allow borrowers to buy a home with a minimum credit score of 580 and as little as 3.5 percent down, or a credit score as low as 500 with at least 10 percent down. If you put down less than 20 percent, however, you’ll have to pay FHA mortgage insurance, which includes a 1.75 percent upfront fee and annual premiums. FHA also insures FHA 203(k) loans, which allow borrowers to buy and fix up a home with the same low credit and down payment flexibilities.