In everyday terms, the FHA program was created to put families into homes without stretching their finances.
In order to allow more flexible financing terms, borrowers are required to pay for mortgage insurance which protects the lender in the event the loan defaults. There is an up-front premium (typically 1.75%) paid at the time of closing, and an annual premium which is escrowed and paid monthly.
Down payments as low as 3.5%
Gift funds are allowed towards the down payment
Closing costs can be optional
No income limit restrictions