The Federal Housing Administration (FHA) offers either fixed rate or adjustable rate mortgages.  The features and guidelines of the program are more flexible for eligible borrowers.  The down payment is much lower for FHA loans, with as little as 3.5% down.  FHA loans are insured by the government. The mortgage insurance premium (MIP) is required upfront cost that can be either financed (rolled into the loan amount) or paid in full as a cost at closing. An escrow for MIP is included in the monthly mortgage payment, to ensure the next year’s premium can be paid in full on the loan anniversary.  FHA financing can be more costly than conventional financing, however, the flexibility and low down payment may be what you need in order to purchase or refinance your home.