For some, the road to have the dream of home ownership realized feels just like a dream that will never come true. It's easy to see why; you need cash for a down payment and that money can be difficult to save up. You also need to have a good credit score, since lenders are not interested in lending money to those who have a less than stellar credit history. If this sounds like you, then you may be thrilled to find out about a special loan program just for people like you, sponsored by the federal government. Read on to find out more and to come one step closer to realizing your home ownership dream.

Is your credit score too low?

The Federal Housing Administration (FHA) has created some special loan programs that allow those with lower scores to still qualify for a home loan. If you have a score lower than 580 (but still above 500), you can get an FHA loan with a down payment of only 10%. The news is even better for those who have a credit score of higher than 580. With a minimum score of at least 580, you may be able to get an FHA loan with an little as 3.5% down. That is far lower than conventional mortgages, where you might need to come up with at least a 20% down payment, and sometimes more.

For example, if the purchase price of your dream home is $100,000, a conventional mortgage might have you paying a huge $20,000 as a down payment. For the two FHA loan programs, that amount would be cut to $10,000 if your credit score is under 580 and only $3,500 if your score is 580 and above. As you can see, FHA loans mean that you need a lot less cash to make your dream come to life.

Have you had to declare bankruptcy?

It can be nearly impossible for those with a bankruptcy on their records to qualify for a conventional financing. That black mark can mean either a denial, paying higher interest rates or having to make a larger down payment. If at least two years have passed since your bankruptcy was final, you may be in luck if you use an FHA loan program. There will some additional hoops to jump through to qualify for these FHA loans, however. Your credit history since your bankruptcy filing must be virtually spotless, and you should be able to show that you have taken on debts in a responsible manner.

Speak to a real estate agent from companies like Charles L Moles Real Estate Services for more information about FHA loans.