FHA mortgage is a type of government-backed home loan that is insured by the Federal Housing Administration (FHA). The FHA loan program was created to help lower-income and first-time homebuyers become homeowners by providing a lower down payment requirement (as low as 3.5%) and more relaxed credit standards compared to conventional loans. FHA loans also offer more flexible terms, such as allowing for higher debt-to-income ratios, which can make it easier for some borrowers to qualify. However, FHA loans also require a mortgage insurance premium (MIP) that must be paid for the life of the loan, and the upfront MIP can be a significant expense. To be eligible for an FHA loan, the borrower must meet certain income, credit, and employment requirements, and the property must meet certain standards.
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