If you’re a first-time homebuyer in Columbia, South Carolina and your credit needs some work, you may not qualify for a conventional mortgage- or if you are able to qualify, the interest rate is likely to be outrageous.

However, an FHA loan may be a good option if you have minimal savings, and your credit is less than stellar. This is a government-backed mortgage loan that does have some substantial advantages- but there are also some disadvantages as well.

If you’re buying a home in or near Columbia, South Carolina, let Bob Rankin with Covenant Mortgage Services help. He will work with you to find the best solution to your financial goals- whether that be purchasing a home, getting a college education, buying a new vehicle, or whatever. He believes the best mortgage is not really what you can afford, per se- but what you can afford and still maintain your current lifestyle.

In this article, we’ll explore the FHA loan option and help you decide if it’s the right choice for you.

FHA Loan Defined

An FHA loan is a government-backed mortgage loan. This program is run through the Federal Housing Administration. However, you will apply for it through a traditional lender, such as your bank or credit union. Since the criteria are a bit more lenient than a traditional mortgage loan, they are targeted towards first-time homebuyers.

One of the main reasons people are drawn to FHA loans is that the down payment can be as little as 3.5% and interest rates/terms are often favorable for new borrowers. The disadvantage of all this is that you’ll be required to pay mortgage insurance for the life of the loan.

How Does an FHA Loan Work?

While an FHA loan is issued by the lender, they are backed by the government, meaning if the borrower does not pay back a lender that issues an FHA-qualified mortgage, the FHA will cover the financial loss of the lender.

In exchange for this, the FHA requires lenders to meet certain borrowing criteria- but since the loans are government backed, and are intended for first-time home buyers, the requirements at not as the requirements of a conventional loan.

The disadvantage is that most FHA loans require mortgage insurance for the life of your loan. You can avoid this by putting down 10%- you will still need mortgage insurance for the first 11 years of the loan. On the other hand, a conventional loan only requires you to have mortgage insurance until you have 20% equity in your home.

How to Get an FHA Loan

If you think an FHA loan is a good option for you, here’s how you can get one:

First of all, make sure that you meet the minimum qualifications. You’ll want to start by checking your credit score to find out if you meet the eligibility criteria. You will also need a valid Social Security number and proof of steady employment.

If you’re in or near Columbia, South Carolina, you can talk to Bob Rankin at Covenant Mortgage Services for advice on whether or not you qualify and how to secure the down payment you need- if you don’t already have it saved up.

When you’re ready to apply, Covenant Mortgage Services can help you with that too or you can look at online lenders. It’s important to note that the lenders set their own credit score requirements, fees, and interest rates within the scope of the FHA guidelines. Therefore, you can (and should) shop around to find the best deal.

If you do qualify for a 3.5% down payment, you might want to consider making a larger one or pay all of your closing costs the date of sale instead of rolling them into the mortgage. By doing this, you can save yourself a lot of money in the long run.


If you are looking to buy a home in or near Columbia, South Carolina, contact Covenant Mortgage Services for your financing needs. The owner, Bob Rankin, will work with you to determine the best solution for your goals. He believes the ideal mortgage is not really based on what you can afford- but what you can afford and still maintain the lifestyle that you’ve become accustomed to.