FHA loan
A mortgage insured by the Federal Housing Administration, allowing low down payments and more flexible credit standards. Borrowers pay an upfront and annual mortgage insurance premium, and loan amounts are capped by county.
Also called: FHA, FHA mortgage, federal housing administration loan
Related terms
Mortgage insurance on FHA loans, made up of an upfront premium usually added to the loan plus an annual premium paid monthly. With less than 10% down, the annual premium lasts for the life of the loan.
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.
A number, usually from 300 to 850, that summarizes how you have handled debt. Lenders use it to decide whether to approve a loan and what rate and mortgage insurance cost to charge.
Someone buying their first home. Many programs define it as anyone who has not owned a home in the past three years, which can open access to special loans and assistance.
A mortgage not insured or guaranteed by a government agency such as FHA, VA or USDA. Most follow Fannie Mae and Freddie Mac rules and require private mortgage insurance when the down payment is under 20%.