An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment. As of 2018, these loans allow the borrower to borrow up to 96.5% of the value of the home (with a credit score of at least 600; otherwise, a 10% down payment is required). The 3.5% down payment requirement can come from a gift or a grant, which makes FHA loans popular with first-time homebuyers. FHA Loans do have a loan limit that varies by county, but is set at $294,515 for most Southeastern NC counties.