If a buyer wants a government-insured mortgage, which type should they consider?

A government-insured mortgage is specifically designed to encourage homeownership by providing protection to lenders against defaults on loans. Among the options provided, the FHA loan stands out as it is backed by the Federal Housing Administration. This form of mortgage aids buyers, particularly those who may not be able to afford a significant down payment or those with lower credit scores, by offering more accessible terms.

The FHA loan typically requires a lower down payment than conventional loans and has more flexible qualifying criteria. Borrowers benefit from this insurance, as it mitigates risk for lenders, making it easier to secure financing. By choosing an FHA loan, buyers can gain access to affordable housing options, which aligns with the intent of government-insured mortgages to promote homeownership for a broader range of individuals.