These are mortgages that are guaranteed against default by the Federal government. Lenders are willing to give mortgages to home buyers with smaller down payments than under conventional financing because the Federal government guarantees the loan against default. The home buyer must pay an insurance premium for this privilege and this cost is usually added to the mortgage. In order to qualify for an FHAM the property in question must meet certain requirements. The maximum amount of loan allowed under this system varies from region to region and is based on the average price of housing in each area. You should contact your REALTOR® or mortgage specialist for further information.