What is the required down payment for an FHA loan?

For an FHA loan, the required down payment is 3.5% of the purchase price of the home. This requirement is aimed at making homeownership more accessible to borrowers who may not have substantial savings for a larger down payment. The 3.5% down payment allows first-time homebuyers or those with lower credit scores to qualify for financing, as FHA loans are designed to support individuals who might be considered higher-risk borrowers.

The 3.5% down payment is one of the key features that makes FHA loans appealing, as it is one of the lowest down payment requirements available. This percentage applies to borrowers with a credit score of 580 or higher; those with credit scores between 500 and 579 may still qualify for an FHA loan, but a 10% down payment would be required.

By utilizing the FHA loan program's reduced down payment feature, many buyers can enter the housing market sooner than they could with conventional loans that typically require larger down payments.