An FHA loan is a mortgage insured by the Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to make homeownership more accessible, particularly for first-time homebuyers and those with lower credit scores.

FHA loans are available to a wide range of borrowers, including first-time homebuyers and those who may not qualify for conventional loans due to lower credit scores. Eligibility requirements include a valid Social Security number, lawful residency in the U.S., and a steady employment history.

The minimum down payment for an FHA loan is typically 3.5% of the purchase price. This is lower than the down payment required for many conventional loans, making FHA loans more accessible to borrowers with limited funds for a down payment.

While FHA loans generally have more flexible credit requirements than conventional loans, specific credit score requirements can vary among lenders. Borrowers with credit scores as low as 500 may be eligible, but a higher credit score can result in more favorable terms.

FHA loans require both an upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium (MIP). The mortgage insurance protects the lender against losses in case the borrower defaults on the loan, allowing for the lower down payment requirement.

Yes, FHA loans can be used for both purchase and refinancing transactions. FHA offers several refinancing options, including the FHA Streamline Refinance for existing FHA borrowers and the FHA Cash-Out Refinance.

FHA loans have specific property requirements, including minimum property standards. These standards are in place to ensure that the home is safe and habitable. Homes purchased with FHA loans must meet HUD's Minimum Property Standards (MPS).

FHA loan limits are determined by HUD based on the median home prices in a particular area. These limits vary by county and are updated annually. Borrowers should check the current FHA loan limits for their specific location.

Yes, FHA loans are assumable, meaning that a qualified buyer can take over the existing FHA loan from the original borrower. This feature can be advantageous if interest rates have increased since the original loan was originated.