Identify a key feature of FHA loans.

FHA loans are designed to make homeownership more accessible, particularly for those who may have lower credit scores or may not have substantial savings for a large down payment. One of the key features of FHA loans is that they allow borrowers to make a lower down payment than is typically required with conventional loans. Borrowers can put down as little as 3.5% of the purchase price, which significantly eases the financial burden associated with buying a home. This aspect is particularly beneficial for first-time homebuyers or those with limited funds, as it lowers the initial cash needed to secure a mortgage.

Other options suggest higher down payment requirements or tie FHA loans exclusively to first-time homebuyers, neither of which accurately represents the nature of FHA loans. Additionally, while mortgage insurance is indeed a requirement for FHA loans, the focus on the lower down payment is a defining characteristic of these types of loans.