FHA loans are government-backed mortgages popular with first-time buyers and those with poor credit due to relaxed income and credit score requirements. These loans feature lower down payments, as low as 3.5%, and mandatory FHA appraisals by certified inspectors. Sellers may refuse offers involving FHA loans due to perceived risks linked to stricter appraisal requirements and concerns over borrower qualifications. The reluctance stems from a desire to minimize complications and expenses in the home selling process, which can lead to a preference for conventional loans.
Sellers view FHA loans as riskier compared to conventional loans due to stricter appraisal requirements. This perception, along with concerns over lenient financial requirements, may deter sellers.
FHA loans are popular among first-time home buyers and those with lower credit scores, offering benefits like lower down payment and closing costs, making them accessible despite extensive requirements.
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