Like a Veterans Affairs loan, a Federal Housing Administration (FHA) loan is one alternative to a conventional loan. FHA loans are insured by the FHA. If the buyer can’t pay the loan, the government pays the lender for any losses. Because of the government’s insurance, lenders are willing to offer FHA loans with smaller down payments, as low as 3.5%. To pay for FHA mortgage insurance, the buyer is charged a monthly mortgage insurance premium and an upfront mortgage insurance premium, which can be financed into the monthly mortgage payments.
A smarter way to buy. A better way to sell.