The FHA was established in 1934 and has since provided loans to over 35 million borrowers, which is more than any organization. But you should understand that the FHA doesn’t actually give funding, it simply insures loans. FHA makes it safer for lenders to grant loans because they know that the FHA will pay off whatever is left should you default.

President Bush convinced Congress in 2006 to pass a proposal to modernize the FHA, which gave deserving families the opportunity to purchase homes. The mortgage rate for the FHA was just 5.5% when the proposal was passed. (Here’s a quick peek at the rates for those looking to compare home mortgage loans. Current FHA mortgage rates dictate that the interest rate is 6 percent for a 30-year fixed loan with 1.875 points. You will also get an interest rate of 6% for a 15 year fixed loan, but the points will only be 1.25.) There are a few reasons why an FHA loan could your best option as a borrower. First, to qualify for the loan you do not need to have high quality credit. Lenders are now much more strict about who they lend to, thanks to the sub-prime lending mess. Simply having average or slightly better than average credit isn’t enough. Considering other things like your income, debt-to-income ratio, and a few other things, you might still be able to qualify for an FHA loan.

Bankruptcy can also be a factor that holds people back. Depending on other factors, people with bankruptcy can still be considered for a loan. If you are really concerned about whether you can secure financing, and you have poor credit or a bankruptcy on record, then you need to get credit consolidation and/or get a debt management program. Typically, people can get help with making the right steps to reduce their debt-to-income ratio, not to mention potentially improving their credit score.

Usually, a much lower than average down payment is required for an FHA loan. This can also be a huge perk for some borrowers. Even for those that have more money to use as a down payment, it can often make more sense to use that money for growth by finding investments that give a good return.

When all is said and done, the FHA is meant to help responsible and deserving people purchase their own homes. This is one of those U.S. government programs that actually does what it’s intended to do.