In the past, there were 2 types of people buying homes in the Housing market, this is going back about 10 years or more. Those that bought a home conventionally (good credit and put 20% money down) and those that bought a home through the FHA Program(those with alittle shaky credit and without the 20% down) Yep, that's right! No 100% financing programs, no mortgage Arms, No interest only home loans, no fun and creative financing. The Banks and lending institutions were not in the market of taking risk! I remember in 1997 when I went to get a home loan, I had 48% down-payment and a 6 year job, and my payment ratios were at 42% which was risky at that time. I had to go to 6 different sources to find the loan that I wanted and not what they wanted me to have! I thought I was going to have to commit the rights to my first born child. So, instead we had Conventional and FHA Loans. Basically what people, sellers, and Realtors thought were Good Buyers and Scary Buyers. FHA stands for Federal Housing Authority and these loans are back and guaranteed by the government for those of you that are not aware. Recently there has even been mention that the FHA loan division might even fall apart. However the government has just recently taken measures to make sure that the program does not disappear. Back onto the Topic though. In the past people perceived FHA Buyers as bad or risky buyers. Realtors were very uncomfortable working with FHA Buyers whether they were selling them a home or helping the Sellers in the FHA process. There were several reasons that Sellers and Realtors were leery of FHA Buyers. To begin with the thought was that these Buyers were Risky and Bad people. Secondly, both the Home Inspector and Home Appraiser could only be FHA individuals. If there was anything in the Home Inspection that deemed something unsafe the Sellers had no choice but to fix it. Sellers thought this was entirely unfair. Imagine that! Fixing unsafe items to turn the Home over to the New Buyers. In Conventional loans the two parties could negotiate what to fix and not fix. Of course the Home Inspection is to determine unsafe conditions in a home,and not a Buyers wish list like wanting the furnace cleaned or getting money out of the Sellers just because the Wife does not like the Sellers choice of the tile backsplash! NOW, all that has changed!!!!!! The Home Inspector and the Home Appraiser's just have to be FHA approved, and only have a few minor guidelines that might be considered a little more strict remain,otherwise it is just like a regular home purchase. However, what most people are not aware is that if a Buyer goes FHA and has less than the 20% down needed to get a mortgage without PMI,. than the PMI they will be paying is less expensive. For Instance I had a girlfriend that was buying a home and she did not have the required 20% down. Both the rates on the conventional and FHA loans were the same, however because FHA is government backed and their PMI providors have to follow the government guidelines, my girlfriend was saving $97.00 a month on her PMI. That is quite a savings if you ask me! Can everyone buy a home FHA? Those that have not owned a home previously, and those that fit the guidelines of the loan. Do Sellers and Realtors still have a "bad feeling" about FHA Home Buyers, YES! But that is because they do not understand the program. Would I put myself and my friends into a FHA mortgage loan if I could, every single time! Times are changing, people's opinions may not! Call me if I can better explain the differences in the 2 different types of loans. What do you have to lose except money! Karen-