A loan with certain restrictions that is guaranteed by the Federal Housing Administration

FHA mortgages are easier to qualify for since they require a super low down payment, usually about 3% of the loan amount, and offer low interest rates. The catch is you can only borrow up to a certain amount, and you have to pay both an up-front and monthly premium for insurance. The insurance safeguards the lender in case you donÕt repay the loan. The up-front cost, usually 2-3% of the loan amount, can be lumped onto the loan and paid off over time. To be eligible you must plan to live in the home that you purchase.

See: Government mortgage
Compare: Conventional loan, VA loan