Loans from the Federal Housing Administration (FHA) are popular options for borrowers because they allow you to buy a home with a relatively small down payment. Designed to promote home ownership, FHA loans make it easier for people to qualify for a mortgage. An FHA loan is a home loan that is insured by the FHA.

In other words, they offer a guarantee to your bank: if you fail to repay the mortgage, FHA will step up and repay the bank instead.