What is the primary advantage of an FHA loan over conventional loans?

The primary advantage of an FHA loan over conventional loans is the lower down payment requirements. FHA loans are designed to help first-time homebuyers and those with less-than-perfect credit by allowing them to make a down payment as low as 3.5% of the purchase price. This makes home ownership more accessible, especially for borrowers who may struggle to save a larger down payment typically required by conventional loans, which often demand 5-20% or more.

By lowering these barriers, FHA loans facilitate home ownership for individuals and families who might otherwise find it challenging to enter the housing market. Additionally, these loans are backed by the Federal Housing Administration, which mitigates risk for lenders and enables them to offer more favorable terms, including those lower down payment thresholds.