This mortgage is a product for first-time home buyers, and in fact, is geared towards first-time home buyers. This is a government-backed loan that many people use to purchase their first home. This is especially true if you don’t have 20% saved up for the down payment. The down payment on an FHA loan can be 3.5%, and that money can be a gift from a close family member. This mortgage program is an alternative to the conventional mortgage, for those that have lower credit scores.