Today, with tighter lending guidelines, the FHA loan is enjoying renewed popularity. FHA loans are government-regulated, so an FHA loan is the same whether you're buying a home in California or Connecticut.
FHA loans are designed for those with less-than-perfect credit. FHA loans have a low down payment requirement which is particularly attractive. The interest rate is competitive, and FHA allows the seller to pay some of the borrower's closing costs.
You will pay mortgage insurance on an FHA loan, but you will likely pay mortgage insurance on any loan you obtain unless you're making a down payment of 20%, or more.
As a side benefit, an FHA loan is assumable by the future buyer of your home.
There are more pros, than cons when it comes to an FHA loan.