What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA) that is designed to make homeownership more accessible. It allows buyers to qualify with lower credit scores, smaller down payments (as low as 3.5%), and more flexible financial requirements compared to conventional loans.

FHA loans often come with competitive interest rates, which are generally lower than those of conventional loans. This is because the FHA insures the loan, reducing the risk for lenders. Homebuyers can take advantage of these lower rates to make homeownership more affordable, especially if they’re first-time buyers or have less-than-perfect credit.

By combining an FHA loan with a rate buydown option or refinancing in the future, buyers can further optimize their monthly mortgage payments, making their dream home a reality while keeping costs manageable.