What is a common requirement when applying for an FHA loan?

A common requirement when applying for an FHA loan is a 1% down payment, which is significantly lower than traditional loan requirements. The Federal Housing Administration (FHA) insures loans made by approved lenders to borrowers with low to moderate incomes. This program is designed to make homeownership more accessible to a broader range of people, particularly those who may not have large sums of money available for a down payment.

The FHA allows borrowers to put down as little as 3.5% of the purchase price, but in some specific cases or promotions, it can be as low as 1%. This feature is attractive to first-time homebuyers or those with less financial flexibility. The lower down payment requirements help to reduce the upfront costs of home purchases, enabling more individuals and families to achieve homeownership who might otherwise struggle to save a traditional 20% down payment.

Additionally, the FHA loan program includes other benefits such as lower credit score requirements, making it easier for borrowers with less-than-perfect credit histories to qualify for financing. Overall, the broader accessibility and affordability options of FHA loans make them a popular choice among many prospective homebuyers.