FHA loans are government-insured loans backed by the Federal Housing Authority. They are designed for low- to moderate-income earners and typically come with the lowest down payments.
For 2021, the FHA floor is set at $356,362 for single-family home loans. While this amount varies by county, this minimum lending amount covers 80% of all U.S. counties.
Because FHA loans are designed for lower-income earners, qualifying for this type of financing is easier than many other loan types. Higher debt-to-income ratios are allowed, and borrowers need only a 3.5 percent down payment. Borrowers can have as low as a 580 credit score and still qualify for an FHA loan.