Mortgages that are insured by the Federal Housing Administration, otherwise known as FHA Loans, are popular options for first and second-time home buyers. FHA loans are relatively easy to qualify for. FHA offers low down payment and low credit requirements which has made these loans an amazing option for any prospective home buyer. Having the loan backed by the government lets lenders be more flexible with their eligibility requirements.
Should a borrower default on repayment of the loan, the FHA reimburses the lender for its loss. With less risk, lenders have more reason to offer FHA loans at competitive rates, which is great for home buyers!