What is the FHA's minimum down payment requirement for mortgages?

The Federal Housing Administration (FHA) requires a minimum down payment of 3.5% of the purchase price for FHA-insured mortgages. This lower down payment requirement is designed to make homeownership more accessible, particularly for first-time homebuyers or those with lower credit scores. By allowing a down payment of just 3.5%, the FHA enables borrowers to enter the housing market with a smaller financial commitment compared to conventional loans, which often require higher down payments.

This requirement reflects the FHA's mission to promote affordable housing and support homeownership among a broader range of consumers. Other down payment percentages, such as 5%, 10%, or 20%, are typically associated with conventional loans or different types of mortgage products, which tend to impose stricter credit requirements and higher down payments. Thus, the FHA's 3.5% minimum is not only significant for eligibility but also aligns with the agency's goals of increasing access to home financing.