FHA loans are lending instruments that are backed by the federal government. The U.S. Department of Housing and Urban Development guarantees these loans so private lenders will be more likely to approve financing. FHA loans are attractive for buyers for a number of reasons. These loans tend to require low down payments and low closing costs. They also tend to have easier credit requirements than standard lending tools. Loans backed by the FHA are available for first-time buyers, seniors and others through a variety of programs