FHA loans are fantastic options for first-time homebuyers, people with low credit scores, people right out of college, or people who don't have huge amounts of cash on hand. These loans provide the opportunity for those in these categories to get into a property in their area.
FHA loans can provide loans as low as 3.5% and credit scores as low as 580.
When using an FHA loan you have to pay PMI Private Mortgage Insurance which can be between 0.45% to 1.05% of the loan amount. But after you hit the 20% mark of your loan you no longer need to pay PMI.
Only FHA-approved lenders can issue FHA-insured loans. A couple of examples of local banks in the Blackhawk area are Bank of Iowa, Lincolns Savings, and Regions Bank.
It's good to do some research or talk to a banker about local FHA opportunities. For example here in Waterloo, they have something called the Waterloo down payment assistance program. It offers more advantages than just the Federal loan mentioned above.