If you cannot come up with the required downpayment for a conventional mortgage, the Federal Housing Administration (FHA) insures mortgages for up to 97% of the appraised value.  A big advantage of the FHA mortgage is the small downpayment of 3 to 5% but the FHA rate is adjustable.

Normally the financial institutes do not insure mortgage for more than about 75% of the appraised value,'cause the chances of loan going bad are reduced.This piece of information regarding FHA is really helpful.Probably one should prefer FHA mortgage.