I followed clone45's answer all the way to the end. A great article! Since I needed the FTP access to install plug-ins to one of my wordpress sites, I changed the home directory to /var/www/mysitename. Then I continued to add my ftp user to the apache(or www) group like this:
sudo usermod -a -G apache myftpuser
After this I still saw this error on WP's plugin installation page: "Unable to locate WordPress Content directory (wp-content)". Searched and found this solution on a wp.org Q&A session: https://wordpress.org/support/topic/unable-to-locate-wordpress-content-directory-wp-content and added the following to the end of wp-config.php:
if(is_admin()) {
add_filter('filesystem_method', create_function('$a', 'return "direct";' ));
define( 'FS_CHMOD_DIR', 0751 );
}
After this my WP plugin was installed successfully.