What are FHA Loans?
FHA loans are common, and they are federal housing administration loans. They are popular among home buyers who don’t have much saved for a down payment or who have a lower credit score. The Federal Housing Administration insures these types of loans, and the requirements include a smaller down payment, lower closing costs, and easier lending standards. FHA loans are generally an alternative option to explore when one can’t obtain a conventional loan. Down payments on an FHA loan are as low as 3.5%, but the FHA requires and provides mortgage insurance on loans by private lenders. The borrower pays for this cost.