What is the minimum down payment typically required for FHA loans?

FHA loans are designed to help lower-income borrowers and first-time homebuyers acquire homes with more accessible financing options. One of the key features of FHA loans is the requirement for a minimum down payment. This requirement is set at 3.5% of the purchase price, making it significantly lower than conventional loans, which often require higher down payments. The 3.5% down payment allows borrowers who may not have a substantial amount of savings to qualify for a mortgage, thereby promoting homeownership among a broader segment of the population. This feature is crucial for making homeownership more attainable, especially for those who may be financially challenged. Additionally, FHA loans come with specific mortgage insurance premiums and guidelines that are designed to protect lenders against default while also providing opportunities for borrowers.