The Federal Housing Administration (FHA) mortgage insurance program is managed by the Department of Housing and Urban Development (HUD), which is a department of the federal government. FHA loans are for all types of borrowers on a primary residence, they can be used for the purchase or refinance of a home and are NOT limited to first-time buyers. Down payments are a minimum of 3.5% of the sale price and can be paid with gift funds or from one of several down payment assistance programs. Loan limits are different than conventional loans and can be found on HUD’s FHA Mortgage Limits page.

With an FHA loan, the government insures the lender against losses that might result from borrower default. The main downside is you as the borrower will be the one to pay for mortgage insurance, which will increase the size of your monthly payments.

A list of documentation requirements for an FHA loan can be found here.