What Is an FHA Loan?

A Federal Housing Administration (FHA) loan is a mortgage loan insured by the FHA. This government-backed loan protects lenders against losses and therefore allows for lower interest rates and down payments. FHA loans are provided only to approved lenders. Different terms, including loan periods, are available through the FHA program and can be chosen by the borrower.

An FHA loan has certain advantages over other types of loan. It is easier to qualify for, it offers greater flexibility to borrowers, and it provides more secure rates. FHA loans are popular among many young would-be home buyers.