After months of searching, you have finally found your dream home and can't wait to make it yours. There's only one problem. It costs as much as several years' salary and you need to find a home loan quickly before someone else puts in a bid on the home where you were destined to live. If you have never taken out a home loan before, the language and options can seem overwhelming, but the following brief guide will help you understand the basics of the three most popular home loan options.

FHA Home Loans

A Federal Housing Administration (FHA) loan is a fixed-rate mortgage that is written for a minimum of 10 and a maximum of 30 years. The down payment requirement is 3.5 percent of the sale price of the home, which makes it an affordable option for most first-time homebuyers. In processing your loan application, mortgage lenders factor in the monthly principal and interest, property taxes and required insurance to arrive at a monthly loan figure. To qualify for the loan, you must present proof of income to insure that you can afford to make the payment.

FHA HUD Home Loans

This is a special program offered by the US government to encourage first-time homebuyers to invest in FHA homes that have been foreclosed by the Department of Housing and Urban Development (HUD). To release the government of the burden of upkeep for these foreclosed homes, HUD offers down payments starting at $100, assistance with closing costs and money toward repair of the home if it is determined that it needs them in order to be habitable. Like the straight FHA loan, HUD loans are also written for 10 to 30 years and are calculated using principal, interest, property taxes and insurance costs.

Conventional Loans

This is an attractive option for first-time home buyers who have excellent credit, as it rewards credit worthiness by offering lower interest rates. The down payment requirements range from 5 to 20 percent of the loan total, and interest rates are set by the current prime market rate.