What type of loan is typically associated with lower down payment options?

FHA Loans are designed specifically to assist homebuyers, particularly those who may not have substantial savings for a down payment. The Federal Housing Administration (FHA) insures these loans, which allows lenders to offer them with lower down payment requirements, often as low as 3.5% of the purchase price. This feature makes FHA loans particularly attractive to first-time homebuyers or individuals with less-than-perfect credit who may struggle to save a larger down payment typically required for conventional loans.

In contrast, conventional loans do tend to require higher down payments—usually around 20%—unless the buyer can secure mortgage insurance, which may still not make them as accessible as FHA loans. Business and commercial loans are not typically associated with residential property purchases and thus are not relevant when discussing down payment options for homebuyers.