FHA home loans are government-insured against default by the Federal Housing Administration (FHA). FHA makes it easier for homebuyers to buy a new home or current homeowners to qualify for a refinance. FHA loans allow for lower credit scores and higher debt-to-income ratios to help more people qualify. FHA loans allow individuals who may not qualify for a conventional mortgage to obtain a loan, especially first-time homebuyers. These loans offer low minimum down payment of 3.5%, reasonable credit expectations, and flexible income requirements. FHA also allows the homebuyer to use a gift from a qualifying family member to cover entire down payment and/or closing costs.