An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration. This branch is part of the U.S department of Housing and Urban Development (HUD).  FHA borrowers pay for mortgage insurance which protects the lender in case the borrower defaults on the loan. FHA loans do not require a large down payment and have many advantages over other types of loans.

It’s important to remember, however, that though FHA loans require lower down payments and credit scores than conventional loans, they do carry other stringent requirements.