What is an FHA mortgage?


The Federal Housing Administration (FHA) insures some mortgages. So an FHA mortgage is a mortgage insured by the FHA, a government institution under the U.S. Department of Housing and Urban Development (HUD). Note that this is not a loan. You would still get an FHA mortgage through a traditional lender.

Different from a conventional mortgage

An FHA mortgage works the same as a agreement conventional mortgage. What differs about it is the terms. FHA mortgages have lower down payment requirements, as low as 3.5%, and you can typically have a lower credit score to get one.

Insurance premiums
These relaxed lending rules come with a price. You must pay insurance premiums: one upfront premium that is 1.75% of the loan and an annual monthly insurance premium (MIP) that is paid monthly, generally for the life of the loan.

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