If your loan is FHA insured, that means that it has been guaranteed by the FHA, which is part of the United States Department of Housing and Urban Development (HUD). The FHA does not loan capital to borrowers, rather, it provides lending agencies with safety by offering mortgage insurance in case the borrower defaults on his or her financial obligations. Accessible to all buyers, FHA loan programs are created to help credit-worthy low-income, and moderate-income families who do not have the qualifications for conventional loans.
Typically, a buyer has to pay less of a down payment on an FHA-insured loan, while the rates remain standard market rates. FHA loan programs are particularly useful to those consumers with less available cash.
