An FHA loan is a mortgage insured by the Federal Housing Administration that helps first time home buyers and individuals with modest incomes buy property. This loan program features lenient credit score guidelines and lower down payment options compared to traditional conventional mortgages. Qualified buyers can put down as little as three point five percent with a credit score of five hundred and eighty or higher. You must pay FHA mortgage insurance premiums to protect the lender in case you default on the loan.