FHA loans were created to encourage homeownership after the great depression. today fha loans are the most used type of mortgage for first-time home buyers. Their low down payment and credit score requirements make them an attractive option for borrowers without a lot of money to put down. The FHA does not issue mortgage loans, they insure the loan.
Like VA loans, an FHA mortgage allows consumers to purchase homes without the need for great credit and a massive down payment. The popularity and safety of FHA financing raises a question: Instead of getting a VA mortgage would it make more sense to get an FHA loan? There are certainly arguments on both sides of the question.