FHA loans are backed by the Federal Housing Administration (FHA) and are popular among first-time homebuyers due to the program’s low down payment and relaxed credit requirements.
FHA loans are ideal for homebuyers without sufficient savings for a large down payment or those with less-than-perfect credit, lacking the ability to qualify for a conventional loan. FHA loans require a minimum credit score of at least 580 to take advantage of the program’s 3.5 percent down payment option. Those with scores below 580 may still qualify for FHA funding, but will need to put at least 10 percent down.
