FHA Loan

An FHA loan is a mortgage insured by the Federal Housing Administration, a branch of HUD. Engineered primarily for first-time homebuyers and borrowers with modest savings, FHA loans permit down payments as low as 3.5% with a minimum 580 credit score. They accommodate higher debt-to-income ratios than conventional loans but require both an Upfront Mortgage Insurance Premium (UFMIP) and ongoing monthly Mortgage Insurance Premiums (MIP).