 TITLE: Is an FHA Loan Right for You? CONTENT: How FHA Loans Work\n------------------\nFHA loans are issued by lenders, but they're insured by the government. This means if a borrower fails to repay a lender who issues an FHA-qualified mortgage, the FHA covers the lender's financial loss.\nIn exchange for this protection, the FHA requires loans offered under its program to meet certain borrowing criteria. But because these loans are government-backed and intended for first-time homebuyers, borrowing requirements are more lenient than those of conventional loans.\nThe downside of the more generous standards is that most FHA loans require you to pay mortgage insurance for the life of the loan. (The only way to get out of it is to put down at least 10%, and then the mortgage insurance drops off after 11 years.) Conventional loans, on the other hand, only require mortgage insurance until you reach 20% equity in the home. END