An FHA loan is a mortgage loan that is insured by the Federal Housing Administration. This type of loan is designed to help lower-income individuals and families purchase homes by making it easier for them to qualify for a mortgage. The FHA’s main goal is to encourage homeownership and promote the stability of the housing market.
FHA loans are unique in that they require a lower down payment than conventional mortgages – typically around 3.5% of the purchase price. Additionally, FHA loans have more lenient credit score requirements, making them a good option for those who may not have perfect credit. However, it’s important to note that FHA loans also have stricter guidelines for the property being purchased, such as requiring an appraisal from an FHA-approved appraiser. Overall, the FHA loan program can be a great option for those looking to become homeowners who may not otherwise qualify for a conventional mortgage.