FHA loans are bad because they have PMI.
There are no good or bad loans; it depends on what’s right for you. I have client who recently called to refi. Their interest-only loan was about to become principal and interest with DOUBLE the payment they currently pay ($980 to $1900). They also had been turned down by 2 banks, who charged them for appraisals that came in lower than what they needed. But we were able to refinance their home under the FHA program with only 2.25% equity.
Yes, they were almost at 100% debt to value (at least not upside down anymore). So is the program bad? No – it allowed them to stay in their home for only $200 more than they currently pay on a No-Cost refi at 3.5%, 30 year fixed.