What is the primary target group for FHA loans?

The primary target group for FHA loans is low to moderate-income borrowers. FHA loans, backed by the Federal Housing Administration, are designed to promote homeownership among individuals who may have lower incomes or less-than-perfect credit history. These loans typically feature lower down payment requirements and more flexible credit guidelines, making it easier for these borrowers to obtain financing and purchase homes.

The focus on low to moderate-income borrowers aligns with the FHA's mission of increasing homeownership opportunities for those who historically may have faced barriers to financing. This inclusivity helps stimulate local economies by enabling more individuals to enter the housing market and invest in their communities. Thus, the characteristics of FHA loans make them particularly suitable for borrowers who might struggle to qualify for conventional loans due to financial limitations.