FHA loans allow down payments as low as 3.5% with credit scores of 580+ (or 10% down with scores 500-579). They're insured by the Federal Housing Administration but issued by private lenders.

Borrowers pay an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, plus an annual MIP of about 0.55% paid monthly. Unlike conventional PMI, MIP usually stays for the life of the loan unless you put 10%+ down.

FHA loan limits vary by county — typically 65% of the conforming loan limit, with higher caps in expensive areas.