If you're looking to buy a home, and you're worried about qualifying for a conventional loan, you need to talk to your lender about a loan through the federal government. A Federal Housing Administration (FHA) loan may be the way to go when you're not quite the right fit for a conventional home loan. Here are four ways that an FHA loan can work to your advantage.

Lower Credit Scores

If you're trying to buy a home, but your credit score isn't anywhere near the 640 range, it's time to look into an FHA loan. One of the benefits of going with an FHA loan is that you can qualify with a much lower credit score--as low as 500 in some cases. That reduced credit score requirement can help you get into a home of your own.

Higher Debt-to-Income Ratio

If you have decent credit, but you have a high debt-to-income ratio, you may not qualify for a conventional home loan. Most conventional home loans require a low debt-to-income ratio. However, FHA loans allow for a higher debt-to-income ratio, which means you can get the loan approval you're looking for even if more of your monthly income goes towards debts.

Non-Occupant Co-Buyers Allowed

If you're looking for a home loan, but you've got a low credit score and a higher debt-to-income ratio, FHA loans will allow you to utilize non-occupant co-buyers to help you qualify for a home loan. Conventional loan programs require that all applicants on a loan be those who will be living in the home. FHA loan programs don't require that, which means you can use a family member's good credit to help you qualify for your home loan.

Reduced Time Limits for Credit Problems

If you've got serious credit problems, such as a foreclosure or bankruptcy, you owe it to yourself to look into an FHA loan. Conventional loans have a lengthy waiting period after bankruptcies and foreclosures. However, you may be able to get approved for an FHA loan three years after a foreclosure and two years after a bankruptcy has been discharged. You might need to pay a slightly higher interest rate to begin with. However, once your credit score goes up and those issues have dropped off your credit report, you'll be able to refinance your home for a lower interest rate and better terms. Contact a company like Andy Boyum - Minnesota Mortgage Guy for more information on FHA loans.