FHA loans are backed by the Federal Housing Administration and are ideal for first-time homebuyers or those with lower credit scores. These loans offer more lenient credit requirements, lower down payment options (as low as 3.5%), and competitive interest rates. FHA loans also allow for higher debt-to-income ratios, making homeownership more accessible.

- Comparative advantages: Easier qualification requirements, including lower credit score and down payment requirements. Allows for a higher debt-to-income ratio.
- Absolute advantages: Down payment as low as 3.5% of the purchase price. Offers options for borrowers with limited credit history or previous financial challenges.