An FHA loan is a government-backed mortgage program designed to assist homebuyers, particularly those with lower credit scores or limited down payment funds. The Federal Housing Administration insures these loans, making them less risky for lenders. Key features of FHA loans include low down payment requirements (typically as low as 3.5% of the purchase price), competitive interest rates, and more flexible qualification criteria.
Borrowers are required to pay mortgage insurance premiums, both upfront and annually, to protect the lender in case of default.
