With the subprime mortgage market pretty much gone, first time home buyers or borrowers with challenging credit may think their options are limited. This is not true. In fact the Federal Housing Administration (FHA) loan is a great program for first time homebuyers, borrowers with low credit scores, and those needing down payment assistance.

So, how do you know if the FHA program is right for you? Well, the FHA loan looks at four elements of the borrower. I call it the four corners of a mortgage.

Credit - This is the first corner. FHA is not a credit score driven system. In fact  it's better to have no credit than to have very bad credit. As long as you have decent credit then you can be considered for a FHA mortgage.

Employment/Income- This is a very important corner. FHA looks at bot the length and stability of employment. It is importnat ot be able to establish at least two years of consistent income. FHA can even help self-employed individuals.

Assets - It is always a good idea to demonstrate that you have two months of mortgage payments saved up. However, you do not need down payment money, as FHA allows down payment assistance from non-profit organizations.

Property - One distinguishing feature is that FHA allows for manufactured homes. The main requirement is that the home needs to have a stem wall. Only FHA qualified appraisers can be used to perform the appraisal as the appraisal needs to meet certain FHA requirements. Otherwise all other property types are acceptable to FHA.

As I said the FHA program looks at the overall picture. So, do not think you do not qualify based on just one factor. Call an experienced mortgage professional in in your area and they should be able to guide you.

Remember, not all lenders are FHA approved. If you feel you qualify for a FHA loan but the loan officer doesn't present that to you as a financing option then make sure you ask why it is not on the table. It would be worth your effort to then contact a FHA approved lender. Additional information on FHA loans can be found on the HUD website.

The Arizona Mortgage Guruis the blog identity of Shailesh Ghimire. He and his wife, Aimee, are home mortgage loan experts in the Phoenix, Arizona area.