FHA loans are a type of mortgages backed by the Federal Housing Administration (FHA). This type of loan is intended to help lower-income borrowers get approved for financing by making home purchases more affordable. FHA loans require a lower down payment and have fewer eligibility requirements than conventional loans. These loan programs provide an ideal option for first-time home buyers and offers competitive interest rates to borrowers with less-than-perfect credit scores. FHA loans also require a small, one-time, up-front mortgage insurance premium (MIP) payment that can be financed within the life of the loan. This type of loan is ideal for those who are ready to purchase a home but lack the money for a large down payment.