Three-and-a-Half Percent Down

With everyone from President Obama to Paul Krugman complaining that letting homeowners buy homes with little or no down payment is a bad idea, why is the Federal Housing Administration backing mortgages requiring only a 3 and a half percent down payment on a $400,000 one-bedroom apartment in "East Williamsburg" Brooklyn? Looks like someone is taking seriously the admonition to get that credit flowing again.