Designed to help low-to-moderate income borrowers, an FHA loan is a federally backed mortgage issued by an approved lender and insured by the Federal Housing Administration (FHA). Most FHA loans only require 3.5% down payment and often allow for lower credit scores than conventional loans. However, minimum credit scores can vary from one FHA lender to the next – requiring a little homework on our part to find the ideal match. All FHA loans come with two types of mortgage insurance. Typically financed into the loan, the FHA charges an up-front mortgage insurance premium of 1.75% of your total loan amount. In addition, most FHA loans require a monthly mortgage insurance premium (MIP) that is paid for the life of the loan – although there are exceptions. An FHA loan is a great option for buyers who fall outside of the conventional loan requirements or have “B” or “C” credit.