Cons: Lower loan limits in most areas nationwide, Up Front Mortgage Insurance which can be good or bad, Longer approval process (banks are taking a lot more FHA applications right now), Owner-Occupied only.
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Cons: FHA has minimum property standards which must be met (meaning it's tough to finance a fixer upper), has stricter guidelines for condo financing, home must be primary residence (no rentals allowed), mandatory mortgage insurance (PMI) regardless of down payment, HUD charges a 1.5% up front funding fee (called MIP) on all loans, sometimes take longer to approve, some sellers don't want to deal with buyers with FHA fincancing
Bottom line is if you are looking for a mortgage with a low down payment or if your credit is not perfect then FHA is probably your best option. If you have a large down payment and stellar credit then you're probably best off shooting for a conforming loan. Even though the list of cons may be a little longer, the value of the pros far outweigh the cons for most borrowers.