Definition of term
FHA loans are a type of mortgage loan insured by the Federal Housing Administration (FHA). FHA loans are available to both first-time home buyers and repeat home buyers. The FHA loan program is popular with first-time home buyers because it allows for a lower down payment and closing costs. FHA loans are also popular with repeat home buyers because they can finance the purchase of a new home and improve an existing home. FHA loans are available in both fixed-rate and adjustable-rate mortgages. FHA loans have an interest rate lower than the conventional market rate. All FHA loans require a monthly mortgage insurance premium (MIP).