Which of the following is not a requirement for obtaining an FHA loan?

One of the key features of FHA loans is that they are designed to help more individuals and families achieve home ownership, especially those who may not have substantial financial reserves. A significant aspect of FHA loans is their flexible down payment requirements. While many conventional loans may require a down payment of 20%, FHA loans allow for much lower down payments, often as low as 3.5% for borrowers who meet certain credit score requirements. This makes them accessible for first-time homebuyers and those with limited cash available for a down payment.

In contrast, the other options reflect actual requirements for obtaining an FHA loan. Borrowers must occupy the home as their primary residence, meet minimum credit score criteria set by the FHA, and document their income and employment history to demonstrate their ability to repay the loan. Thus, option C stands out because it inaccurately portrays the down payment expectation for FHA loans.