The Housing and Urban Development FHA loan is a favorite for first time homebuyers. The FHA loan requires a low 3.5% down payment. These typically have lower rates and a more lenient underwriting style for those with limited or no credit, or past credit challenges. The FHA loan can also be coupled with a Down Payment Assistance program to help clients whomay struggleto produce a down payment on their own. FHA offers a 15 or 30 year fixed rate option as well as a 5/1 Adjustable Rate option.