FHA Loans

Lower down payments. Flexible credit. The government-backed loan designed to make homeownership possible — even if your finances aren’t perfect.

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OVERVIEW

What Is an FHA Loan

An FHA loan is a mortgage insured by the Federal Housing Administration — a government agency that’s been helping Americans become homeowners since 1934. FHA loans are designed for buyers who may not qualify for conventional financing due to lower credit scores, limited savings, or higher debt-to-income ratios.
Because the government insures these loans, lenders can offer more flexible qualification requirements: down payments as low as 3.5%, credit scores starting at 580, and higher allowable debt ratios than conventional loans.
FHA loans are especially popular with first-time homebuyers, but they’re available to anyone purchasing a primary residence — whether it’s your first home or your fifth.

Benefits

Why Choose an FHA Loan?

Low Down Payment

Put as little as 3.5% down with a credit score of 580 or higher. That’s $7,000 on a $200,000 home — significantly less than many conventional options.

Flexible Credit Requirements

Credit scores as low as 580 qualify for 3.5% down. Scores between 500-579 can still qualify with 10% down. Past credit issues? FHA is more forgiving.

Higher Debt-to-Income Allowed

FHA allows debt-to-income ratios up to 50% in some cases — higher than most conventional loans. More of your income can go toward housing.

Gift Funds Welcome

Your entire down payment can come from gift funds — from family, employers, or approved down payment assistance programs. No savings required.

Assumable Loans

FHA loans are assumable, meaning a future buyer could take over your loan at your locked-in rate — a major selling point if rates rise.

Streamline Refinancing

Already have an FHA loan? The FHA Streamline program lets you refinance with minimal paperwork — often no appraisal or income verification required.

Eligibility

Do You Qualify for an FHA Loan?

FHA loans have more flexible requirements than conventional mortgages. Here’s what you need:

Requirement Standard Notes
Credit Score 580+ (3.5% down) 500-579 with 10% down
Down Payment 3.5% minimum Can be 100% gift funds
Debt-to-Income Up to 43% (up to 50% with compensating factors) More flexible than conventional
Employment 2 years history Gaps may be explained
Property Type Required (MIP) Varies by loan amount
Mortgage Insurance Required (MIP) Upfront + annual premium

FHA requirements are guidelines, not hard rules. Compensating factors — like cash reserves, minimal payment shock, or residual income — can help you qualify even if one area is weaker. Your loan officer will review your complete financial picture.

FHA Loan Options

FHA Programs

Best For: Buying a home

FHA Purchase Loan
The standard FHA loan for purchasing a primary residence. Low down payment, flexible credit, and competitive rates make this the go-to choice for first-time and credit-challenged buyers.
Key Features:
– 3.5% down with 580+ credit
– 1-4 unit properties
– Seller can pay up to 6% of closing costs
Learn More

Lowering your rate on an existing FHA loan

FHA Streamline Refinance
Already have an FHA loan?
The Streamline program lets you refinance to a lower rate with minimal hassle — often no appraisal, no income verification, and reduced paperwork.
Key Features:
– No appraisal typically required
– No income/employment verification
– Must result in “net tangible benefit”
– Must be current on existing FHA loan
Learn More

Accessing your home’s equity

FHA Cash-Out Refinance
Refinance your current mortgage (FHA or conventional) into a new FHA loan and receive cash from your equity. Use funds for home improvements, debt consolidation, or other needs.
Key Features:
– Up to 80% loan-to-value
– 580+ credit score required
– Primary residence only
Learn More

Buying a fixer-upper

FHA 203(k) Rehabilitation Loan
Finance both the purchase and renovation of a home with a single loan. The 203(k) program lets you roll repair costs into your mortgage — ideal for homes that need work.
Key Features:
– Standard 203(k): Major renovations (structural)
– Limited 203(k): Minor repairs up to $35,000
– Repairs completed after closing
Learn More
Compare

How FHA Loans Compare

Min. Down Payment Min. Credit Score Mortgage Insurance DTI Limit Property Types Loan Limits Eligibility
3.5% 580 (500 with 10% down) Required (life of loan**) Up to 50% Primary only County-specific Anyone
3-20% 620+ Removable at 20% 43-45% Primary, 2nd, investment Higher conforming Anyone
0% No minimum None Flexible Primary only No limit Veterans only
*Most lenders require 620+. MIP lasts life of loan if down payment < 10%; 11 years if ≥ 10%
FHA loans are ideal for buyers with lower credit scores or limited savings. If your credit is strong (700+), compare FHA to conventional — the removable PMI on conventional loans may save money long-term.

THE PROCESS

From Application to Keys

Apply Online

15-20 min

Complete your application and upload basic documents.

Underwriting

1-2 weeks

We verify your information and submit to FHA for approval.

FHA Appraisal

3-7 days

An FHA-approved appraiser confirms value and property condition.

Lock Your Rate

Same day

Secure your interest rate while we finalize approval.

Close

Same day

Sign final documents and get your keys.

FAQs

Frequently Asked Questions

FHA loans require mortgage insurance premium (MIP) in two parts: an upfront premium (1.75% of loan amount, usually financed into the loan) and an annual premium (0.55% for most loans, paid monthly). MIP protects the lender if you default.

If you put less than 10% down, MIP lasts the life of the loan — the only way to remove it is to refinance into a conventional loan once you have 20% equity. If you put 10%+ down, MIP drops off after 11 years.

FHA loan limits vary by county and are updated annually. For 2024, limits range from $472,030 in standard areas to $1,089,300 in high-cost areas. Contact us for limits in your area.

No. FHA loans are for primary residences only. However, you can buy a 2-4 unit property with FHA financing if you live in one of the units — and use rental income to help qualify.

FHA loans can finance single-family homes, 2-4 unit properties, condos (in FHA-approved complexes), and manufactured homes on permanent foundations. The property must meet FHA minimum property standards.

Yes, after waiting periods: 2 years after Chapter 7 bankruptcy, 1 year into a Chapter 13 repayment plan, and 3 years after a foreclosure. Extenuating circumstances may shorten these periods.

Yes — 100% of your FHA down payment can come from gift funds from family members, employers, unions, or approved down payment assistance programs. Gift funds must be documented with a gift letter.

FHA loans have lower credit requirements (580 vs 620), lower down payments, and more flexible DTI ratios. Conventional loans have removable PMI and can finance investment properties. Your loan officer can help you compare.

Ready to See If FHA Is Right for You?

Get pre-approved in minutes — no commitment, no obligation. Our loan officers will help you find the best path to homeownership.