The Federal Housing Administration ("FHA") provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. This insurance reduces the risk to the lenders because the FHA will pay in the case of a loan default. In turn, lenders are willing to offer loans with a low down payment. The required down payment on a FHA loan is only 3.5% if you have a credit score of 580 or higher. However, be aware that this is the minimum credit score required by FHA but an individual lender providing the FHA loan may require a higher score.
FHA Loan Pros: