FHA loans come with their share of downsides that are important to consider. First and foremost, you’ll incur additional costs in the form of mortgage insurance, both upfront and on an annual basis, which increases the overall expense of the loan. FHA loans require the property you’re buying to meet specific FHA standards, potentially limiting your options. Additionally, there are limits on the amount the FHA will insure, which could be a drawback if you’re eyeing a higher-priced home. While the down payment requirement is lower, other loan options might offer more favorable terms if you can afford a larger down payment. It’s crucial to carefully evaluate these factors before committing to an FHA loan.