What is a FHA Loan?

The Federal Housing Administration (FHA) is a federal agency that supports many mortgages through a range of guarantee and insurance programs. In the most common types of FHA loans, the agency ensures that if the borrower defaults, the lender will receive repayment from the insurance. That insurance encourages lenders to make loans they might otherwise consider too risky. 

FHA loans may be available to buy a house with as little as 3.5% down, especially for first-time homebuyers.