FHA Loans: How They Work

This loan type helps US buyers with limited savings or lower credit by insuring lenders, while borrowers still apply through approved private lenders.
Qualified buyers with credit scores of 580 or higher may put down as little as ~3.5%, while scores from 500 to 579 generally require 10%.
These loans typically cover primary residences, not vacation or investment homes, and borrowing limits vary by county and property type across the US.
Monthly payments can include principal, interest, mortgage insurance, taxes, homeowners insurance, and required escrow, so buyers should weigh upfront savings against long-term costs.
This financing often suits buyers with lower credit or limited cash, while stronger-credit borrowers may prefer conventional options or refinance after building equity.