Which statement is true about FHA loans?

FHA loans, or Federal Housing Administration loans, are designed to make homeownership more accessible, particularly for individuals with lower credit scores or limited funds for a down payment. The statement that FHA loans require a down payment is correct. Typically, FHA loans allow for a down payment as low as 3.5% of the purchase price, making it a more manageable option for many buyers compared to conventional loans, which may require larger down payments.

This requirement helps ensure that borrowers have some equity in the property from the start, which can reduce the risk for lenders. The structure of FHA loans aims to benefit first-time homebuyers, as they often have not built enough credit history or savings to qualify for traditional mortgage options. Therefore, the requirement of a down payment, albeit a low one, remains a key aspect of FHA loans.