Backed by the Department of Housing and Urban Development, the FHA mortgage is the most popular, and often the easiest loan to obtain for first time home owners. The FHA (Federal Housing Administration) mortgage offers borrowers the ability to put as little as a 3.5% down in the form of payment. Those funds can even be gifted (under certain conditions) by a family member.

Sellers are also allowed to contribute up to 6% of the purchase price towards the buyers closing and prepaid costs. The FHA loan can be financed as a 30 or 15 year fixed, and a 3/1 or a 5/1 ARM for 1-4 unit properties While there are limits to the size of FHA loans, they are generous enough to handle moderately-priced homes almost anywhere in the country.