What is an FHA loan? The literal definition of an FHA loan is pretty straightforward: It’s a mortgage that’s insured by the Federal Housing Administration. But that doesn’t really tell you much.
So … let’s try again. What is an FHA loan, really? FHA home loans are geared toward borrowers who have lower down payments or credit challenges that may make it difficult to buy a home. This makes these loans particularly attractive to first-time homebuyers.