The Federal Housing Administration (FHA) loan is a mortgage that is insured by qualified lenders. The purpose of the loan is to decrease lender risk and increase the housing market. FHA loans are for low income individuals with a credit score as low as five hundred. To maintain the loan the borrower must pay a twelve-monthly insurance mortgage to FHA to keep the loan. Let’s just say the borrower does not have a credit history, well with FHA the lender does not look at credit score alone but at other things for example rent payments. According to Investopedia with an FHA loan “the lesser the credit score and the lesser the down payment, the higher the interest rate.” For the loan to be approved the borrower must have mortgage insurance. To be eligible for an FHA loan the pledger with a credit score of five hundred eighty or lower must make a down payment of ten percent or higher, the pledger must have proof of steady income and employment, and the home being refinanced or purchased is pledgers main residence (“FHA Loan Basics, 2018).