An FHA loan is a government backed mortgage insured by the Federal Housing Administration, designed to help low to moderate income buyers purchase a home. Because the government insures the loan, lenders offer easier qualification standards, including credit scores as low as five hundred and eighty. Borrowers can qualify with a down payment of as little as three point five percent of the purchase price. However, borrowers must pay upfront and annual mortgage insurance premiums throughout the life of the loan.