Now an agency within HUD, the Federal Housing Administration was established in 1934 to advance opportunities for Americans to own homes. By providing private lenders with mortgage insurance, the FHA gives them the security they need to lend to first-time buyers who might not be able to qualify for conventional loans.  With the FHA, you do not need perfect credit or a high-paying job to qualify for a home loan. There is no minimum income requirement; however, you must prove steady income for at least three years and demonstrate that you have consistently paid your bills on time. The FHA makes loans more accessible by requiring smaller down payments than conventional loans. In fact, an FHA down payment could be as little as a few months rent – a minimum of 3.5% of the purchase price. However, gift funds can be used for your down payment and closing costs.  Anyone who meets the credit requirements, who can afford the mortgage payments and closing costs, and who plans to use the mortgaged property as a primary residence can apply. The FHA does have loan limits which vary throughout the country. View the FHA loan limits for the city where you want to purchase.