MORTGAGE GLOSSARY
What Is an FHA Loan?
The short definition
An FHA loan is a mortgage insured by the Federal Housing Administration. The government backing lets lenders offer more flexible qualification requirements than a typical conventional loan.
Who it tends to fit
FHA loans often allow lower credit scores and smaller down payments — sometimes as low as 3.5% down. See what credit score you need to buy a house for typical ranges by loan type.
The tradeoff
FHA loans typically require mortgage insurance for the life of the loan (unlike conventional PMI, which can usually be removed), and loan amounts are capped based on location.
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