An FHA Loan is a residential mortgage insured by the Federal Housing Administration, a branch of the US Department of Housing and Urban Development (HUD).
FHA loans are designed to expand access to homeownership for first-time buyers and borrowers with modest savings or lower credit profiles: - Low Down Payment: Requires only 3.5% down payment with a FICO score of 580+. - Flexible Credit: Borrowers with credit scores between 500 and 579 may qualify with a 10% down payment. - Mortgage Insurance (MIP): Requires an Upfront Mortgage Insurance Premium (UFMIP, 1.75% of loan) plus an Annual MIP paid monthly. For loans with less than 10% down, MIP remains active for the entire 30-year life of the loan.