The United State’s government, however, provides FHA-backed loans that are designed to help Americans with less than perfect credit own their own homes. It does this by securing and insuring the loan through the FHA loan structure. It is easy to see that, while these two types of loans may seem similar, they serve two very different needs.
A Hard Money Loan Is Not Just for People without Perfect Credit
The fact that your credit rating is not heavily taken into consideration for this type of loan does not mean that it is ideal for a long-term engagement, like buying yourself a home to live in. It is ideal for getting the cash necessary on-hand in order to develop a property and sell it within a short time frame.
That short time frame is key, since the government-backed FHA loan is anything but speedy. Anyone who has worked with the state for just about any reason should be aware of this, and, if you are holding onto a property that is costing you money every day that you own it, you can quickly sink into the red while waiting for a conventional loan.