Many people hear the term "FHA loan," and incorrectly assume the
Federal Housing Administration is a mortgage lender. That is not the
case. Established in 1934, the FHA helps lower-income, first-time home
buyers get approved for a home loan by providing private lenders with
mortgage insurance. This gives the lender the security of knowing the
loan will be honored if the buyer defaults on the loan and allows
buyers who might not otherwise qualify for a conventional loan get
approved. FHA loans are available to individuals with less than
perfect credit and often require a smaller down payment (usually at
least 3%) than conventional loans. FHA loan limits vary throughout the
country depending on the guidelines that apply to the particular
market. The FHA and lender will require a real estate appraisal as a
routine part of the mortgage application process. For more information
on FHA loan insurance, visit the U.S. Dept. of Housing and Urban
Development's Web...

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