The FHA program was designed to help moderate income households but there are a lot of misconceptions about FHA. The FHA that I speak of is the Federal Housing Administration, a part of the United States Department of Housing and Urban Development (HUD). It is totally separate from the old FHA which was changed to FmHA to seperate it from HUD's FHA and again to Rural Development (RD) a part of the United States Department of Agriculture. Two quick clarifications before I proceed. FHA does NOT have a maximum income limit nor does FHA set the interest rate for a home loan. FHA does have a maximum mortgage amount. The lender, not FHA establishes the interest rates. There are several programs out there that benefit current and potential homeowners. The one that is getting the most interest now is the 203(k) Streamline loan. FHA programs are established by Congress and 203 is the section of the National Housing Act that allows FHA mortgages to happen. The (k) is the subsection that allows the purchase price to be lumped with rehab costs and the result is an improved home with fewer closing costs. Also, when the loan closes the seller is paid in full and an escrow account is established for repairs. This is a great selling point! You noticed that there was "Streamline" in there somewhere? The 203(k) loan is broken into two categories. The easiest and most used in our area is the Streamline version. Repair costs may not exceed $35,000 and the documentation and contractor requirements are less. Nothing on the footprint of the home can be changed. These are ideal particularly for homes that have been in foreclosure and are not eligible for an FHA loan because they don't meet FHA guidelines. They are also good for updating the home such as adding central heat/air, insulation, a new roof, carpeting, paint, and energy efficient items only to name a few. What I call the 'Regular' 203(k) is a more comprehensive rehab that may include changes to the footprint, including for example, the addition of a garage or master bedroom and bath. These are a little more complex and requires more paperwork but I have seen some real successes when these were done. These loans take a little longer to get processed because there are fewer lenders that offer the program, there must be a plan for the rehab so that the appraiser can value the property both "as is" and "as rehabilitated." Please keep that in mind when writing your offer. It will help everyone. This is my version of the 203(k) program. I hope this has helped you to help others. Please feel free to ask questions and I'll do my best to answer them or to point you to someone who can.