What is the minimum down payment for an FHA loan?

The minimum down payment for an FHA loan is 3.5%. This requirement is designed to make homeownership more accessible for first-time buyers and those with less-than-perfect credit, as the Federal Housing Administration insures these loans. The lower down payment allows more individuals to qualify for home loans, as it reduces the barrier of entry compared to conventional loans that typically require a higher down payment.

The 3.5% down payment is applicable to borrowers with a credit score of 580 or higher. For those with lower credit scores, a higher down payment may be required to mitigate the lender's risk. This flexibility is a key feature of FHA loans, making them a popular choice for many homebuyers.