An FHA (Federal Housing Administration) Loan Is A Loan Insured Against Default By The FHA.
In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. FHA loans are not for everybody. Nevertheless, they are a great help to some borrowers. FHA loans allow people to buy a home with a down payment as small as 3.5%. Other loans might not allow such a low down payment.