Lower down payments and flexible credit requirements make FHA loans an excellent option for first-time homebuyers.
FHA loans are mortgage loans backed by the Federal Housing Administration, designed to make homeownership more accessible and affordable for Americans.
FHA loans are issued by private lenders but insured by the Federal Housing Administration. This government backing allows lenders to offer more favorable terms, including:
FHA loans are particularly beneficial for:
Important Note
FHA guidelines can be flexible. Even if you don't meet all criteria, you may still qualify. Each situation is evaluated individually, and compensating factors can help offset certain shortcomings. Contact us for a personalized assessment of your unique situation.
Minimum down payment of just 3.5% for credit scores of 580 or higher, making homeownership more accessible.
Credit scores as low as 500 may qualify with a 10% down payment, helping those with less-than-perfect credit.
Sellers can contribute up to 6% of the purchase price toward the buyer's closing costs.
Non-occupant co-borrowers can help you qualify even if they won't live in the home.
More flexible debt-to-income ratio requirements than conventional loans.
Pay off your loan early without penalties, giving you financial flexibility.
Understanding the FHA loan application process helps you prepare and navigate your homebuying journey with confidence.
Review your credit reports and scores. FHA loans require a minimum score of 580 for a 3.5% down payment or 500 for a 10% down payment.
Work with an FHA-approved lender to determine how much you can borrow based on your credit, income, and existing debt.
Find a property that meets FHA standards and falls within FHA loan limits for your area. The home must be your primary residence.
Submit a full mortgage application with your chosen FHA-approved lender, providing all required financial documentation.
The lender will order an FHA appraisal to verify the home's value and ensure it meets minimum property standards.
The lender reviews your application, credit, income, and the property appraisal to make a final decision on your loan.
Sign final paperwork, pay closing costs, and receive the keys to your new home. FHA loans require payment of an upfront mortgage insurance premium at closing.
With our credit still recovering, we didn't think we could buy a home yet. The FHA loan made it possible with just 3.5% down. We're now building equity instead of paying rent!
First-time homebuyers, Chicago
As a single dad with student loans, I was worried about qualifying for a mortgage. The FHA loan worked with my debt-to-income ratio when other loans wouldn't.
Healthcare worker, Miami
Our growing family needed more space but we wanted to keep cash for renovations. With the FHA's low down payment, we got our dream home and had money left for updates.
Growing family, Denver
Get answers to the most common questions about FHA loans.
FHA loans are accessible to borrowers with a wider range of credit scores. You may qualify with a credit score as low as 580 with a 3.5% down payment, or as low as 500 with a 10% down payment. However, individual lenders may have their own requirements above the FHA minimums.
FHA loans require a minimum down payment of 3.5% of the purchase price if your credit score is 580 or higher. If your credit score is between 500-579, you'll need a minimum down payment of 10%.
FHA loans require two types of mortgage insurance: an upfront premium of 1.75% of the loan amount (which can be financed into the loan) and an annual premium that ranges from 0.45% to 1.05% of the loan amount (paid monthly), depending on your loan amount, term, and loan-to-value ratio.
Yes, the FHA allows you to use gift funds for the entire down payment. The gift must be documented with a gift letter, and there should be a clear paper trail showing the transfer of funds from the donor to you.
FHA loans can be used to purchase or refinance single-family homes, 2-4 unit properties, condominiums in FHA-approved projects, and manufactured homes that meet certain requirements. The property must be your primary residence, meet minimum property standards, and fall within FHA loan limits for your area.
If you make a down payment of less than 10%, you'll pay mortgage insurance for the life of the loan. If your down payment is 10% or more, you'll pay mortgage insurance for 11 years. However, many borrowers refinance to conventional loans once they have sufficient equity to eliminate this ongoing cost.
Yes, FHA loan limits vary by county and are based on local housing costs. In 2023, the FHA loan limits for a single-family home range from $472,030 in low-cost areas to $1,089,300 in high-cost areas. Limits are higher for multi-unit properties.
Generally, you can only have one FHA loan at a time since these loans are intended for primary residences. However, there are exceptions for certain situations like relocation for work, family size increases, or if you're a co-borrower on another person's FHA loan.
FHA loans are government-insured with more flexible credit requirements and lower down payment options (as low as 3.5%), but require mortgage insurance for most borrowers. Conventional loans aren't government-backed, typically require higher credit scores (usually 620+), offer down payments as low as 3% for some programs, and allow you to remove private mortgage insurance once you reach 20% equity.
18071 Fitch Ste 200, Irvine CA 92614
915 Highland Pointe Dr, Ste 200, Roseville, CA 95678
3401 Mallory Lane, Franklin, TN 37067
For information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. E Mortgage Capital, Inc. d/b/a E Mortgage Capital, NMLS# 1416824. Equal Housing Lender (NMLS consumer access: https://www.nmlsconsumeraccess.org/_)
.
A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at