FHA loans are insured by the Federal Housing Administration and require as little as 3.5% down payment. While FHA loans are designed for owner-occupied properties, savvy investors use them for house hacking by purchasing 2-4 unit properties, living in one unit, and renting the others. This strategy allows investors to enter the market with minimal capital while building equity and cash flow. FHA loans also accept lower credit scores than conventional products, making them an accessible entry point for new investors.