FHA Home Loans

FHA loans are insured by the Federal Housing Administration, which allows lenders to offer more flexible credit and down payment requirements than most conventional loans. It's one of the most widely used programs for first-time buyers and anyone rebuilding their credit, though it does come with mortgage insurance premiums for the life of the loan in most cases.

Who it's for

• First-time homebuyers with limited savings for a down payment
• Borrowers with a shorter or less-than-perfect credit history
• Buyers who don't currently qualify for conventional financing
• Anyone prioritizing a lower upfront cash requirement over the lowest long-term cost

Key features

• Down payments as low as 3.5% with a qualifying credit score
• More flexible credit and debt-to-income guidelines than conventional loans
• Upfront and annual mortgage insurance premiums (MIP) apply
• Available for purchases and both rate-and-term and cash-out refinances
• Gift funds from family are commonly allowed toward the down payment