Low Down Payment
An FHA loan is typically one of the easiest types of home loans to qualify for because it allows a low down payment and less-than-perfect credit. An FHA mortgage has a maximum loan-to-value ratio of 96.5 percent, meaning you only need a 3.5 percent down payment.
Because of their low credit and down payment requirements, FHA loans are typically much easier to qualify for than conventional loans and make the most popular type of first-time homebuyer loan used to purchase a home.
Unlike conventional home loans, FHA loans are government-backed, which protects lenders against defaults, making it possible for them to offer prospective borrowers more competitive interest rates on traditionally more risky loans.
FHA home loans are assumable, which means that if the borrower decides to sell the house, the new buyer can take on the loan in their place. Such a feature can also be very useful, for instance, if they need a co-signer in order to buy a house but later want to assume full responsibility for the loan when they get sufficient funds.