Federal Housing Administration Loan

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.