FHA loans are widely used in the DC housing market. In the last two years, half of my clients have utilized the lending program. Before 2009, I never had a client use FHA. Before 2009 there was also 0% down loans. Oh how the lending landscape has changed!
An article in the Post's real estate section does a good job of recapping the recent changes. I've written about some of these changes like the up front insurance premium. It was 1.75% but earlier this year it was raised to 2.25%. The article also includes a summary of upcoming changes. If you're going to use an FHA loan to finance a purchase, this is a must read.