The government founded FHA through the National Housing Act of 1934 in response to the Great Depression to help the country get back on track.

The housing market was flat on its back (sort of like it is today). For homebuyers seeking home loans, terms were almost impossible to meet. Requirements were: A whopping 50% down payment; payments spread out over only 3 to 5 years with a balloon payment due at the end.

FHA revolutionized the home loan industry by offering 30 year home loans and made the dream of home ownership available to Americans nationwide.

With recession seemingly right around the corner, and with the implosion of the sub-prime mortgage market... FHA home loans are quickly becoming the home loan of choice again. FHA Home Loans provides families an opportunity to become homeowners.

Be Honest With Yourself About Your Credit Report

I am a very open and honest person... Meaning, the tips that I give you in the next section may not apply to you, if the "repo man" is knocking on your door, or if you've been served with foreclosure papers.

Even with that said it's not the end of the world. You might just need a more customized plan... You can visit this link to find out more about your unique situation and to get help with your bad credit report.

Most people have no clue what their credit reports look like. Whether or not you are trying to obtain, or refinance a home loan right now. I really suggest that you get a copy of your credit reports.

"Free credit report" doesn't always mean free. They try and upsell you to purchase an "Tri-Merged Credit Report". Here are the secret "back door" links directly to the credit bureaus to get your free credit:

• Experian Free Credit Report
• TransUnion Annual Credit Report
• Equifax Free Credit Report

You are entitled to a free credit report either every 12 months, if you have been denied credit in the past 60 days or if you believe that you have been a victim of fraud. I'm sure that you'll fall into one of those three catagories.

The number one benefit of an FHA Home Loan is flexible "common sense" credit guidelines.

Neither the lack of credit history nor the borrower's decision not to use credit may be used a basis for rejecting the home loan application.

FHA also recognizes that some borrowers may not have an established credit history.

For those borrowers, and for those who do not use traditional credit, the lender must develop a credit history from "Non Traditional" credit references which may include but are not limited to:

• Rental History
• Gas, Electric (utility) Bills
• "Co-Pay" Portions of Insurance
• Your Child's Day Care Payments
• Car Insurance Payment History
• School Tuition Payments
• Home Phone Service
• Cable Bill

Judgments

Court ordered judgements must be paid off before the mortgage loan is eligible for FHA insurance endorsement.

Note: an exception may be if the borrower has agreed with the creditor to make regular and timely payments on the judgment.

Basically, if you have an outstanding judgment and trying to obtain a home loan with FHA put it into repayment. Collections Accounts FHA does not require that collection account be paid off as a condition of obtain a home loan approval.

The borrower must explain in writing all collections and judgments

Bankruptcy

Chapter 7: A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA insured home loan if at least 2 years have passed since the date of the discharge of the bankruptcy.

Chapter 13: A Chapter 13 bankruptcy also does not disqualify a borrower from obtaining an FHA insured home loan as long as 1 year has passed and the borrower's payment history has been made on time.

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For a 30 minute private consultation with an FHA approved loan counselor or to learn more you can visit http://www.MyHomeLoanTips.com.

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The following news feeds provide excellent additional FHA home loan information.