An FHA loan is a mortgage made by an approved lender and insured by the Federal Housing Administration. It is known for flexible credit guidelines and a minimum down payment that may be 3.5% for qualified borrowers.
Why it matters
FHA can be useful when a buyer has limited savings or a less-than-perfect credit history, but mortgage insurance and property standards must be part of the comparison.
On a $400,000 purchase, 3.5% down would be $14,000 before closing costs. Eligibility, loan limits, rate, mortgage insurance, and the property still need lender review.
What to remember
- ✓The home generally must be your primary residence.
- ✓FHA loans include upfront and annual mortgage insurance.
- ✓An FHA appraisal also considers minimum property standards.
- ✓Sellers can contribute toward eligible closing costs within program rules.
FHA is neither a beginner loan nor a last resort—it is one option. I’ll help you compare it side by side with conventional and assistance programs.
This guide is for education, not a loan quote or legal, tax, insurance, or financial advice. Eligibility and transaction details vary. Confirm your options with the appropriate licensed professional.