FHA

First-time buyers or lower credit scores

Government-insured loans designed for accessibility. Lower credit requirements and down payment minimums make homeownership possible for more families.

Program Overview

How FHA Loans Work

FHA loans are mortgages insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). Created in 1934, the FHA program was designed to expand homeownership by reducing the barriers that keep many families from buying a home.

The key advantage of an FHA loan is accessibility. Borrowers can qualify with a credit score as low as 580 and a down payment of just 3.5%. For those with scores between 500 and 579, a 10% down payment is required. These lower thresholds make FHA loans one of the most popular choices for first-time buyers.

FHA loans do require mortgage insurance, which includes an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount (usually financed into the loan) and an annual premium paid monthly. For most borrowers, this annual premium is 0.55% of the loan amount. On loans with less than 10% down, mortgage insurance remains for the life of the loan.

One often-overlooked feature of FHA loans is that they are assumable. This means a future buyer can take over your FHA loan at your original interest rate, subject to qualification. In a rising rate environment, this may be an attractive feature for future buyers of your home.

Key Features

  • Down payment as low as 3.5% with 580+ credit score
  • Lower credit score requirements than conventional loans
  • Gift funds accepted for the entire down payment
  • Seller can contribute up to 6% of the purchase price toward closing costs
  • Assumable loans, which may be advantageous in certain rate environments
  • Available for primary residences only
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The Process

How It Works

1

Pre-Approval and Planning

We evaluate your credit, income, and savings to confirm FHA eligibility and identify the best structure for your budget and goals.

2

Find Your Home and Make an Offer

With your pre-approval in hand, you can confidently shop and make offers. FHA loans are accepted by the vast majority of sellers.

3

FHA Appraisal and Underwriting

An FHA-approved appraiser evaluates the property to confirm it meets HUD minimum property standards. Your loan goes through underwriting simultaneously.

4

Close on Your New Home

Once all conditions are satisfied, you close on your loan. The upfront mortgage insurance premium is typically financed into your loan amount.

Ideal Borrower

Who This Program Is For

FHA loans are built for buyers who may not have perfect credit or a large down payment but have stable income and a desire to own a home.

First-time homebuyers with limited savings
Borrowers rebuilding credit after a financial setback
Buyers who want to use gift funds for their entire down payment
Families with moderate income who qualify for seller-paid closing cost assistance
Borrowers with DTI ratios up to 50% (with compensating factors)

Run the Numbers

Use our calculator to explore payment scenarios, compare options, and see how a fha loan could fit your financial plan.

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Common Questions

FHA FAQ

If you put less than 10% down, FHA mortgage insurance stays on the loan for its entire term. If you put 10% or more down, the annual premium drops off after 11 years. Many borrowers choose to refinance into a conventional loan once they reach 20% equity to eliminate mortgage insurance entirely.
A standard FHA loan requires the property to meet HUD minimum property standards at the time of purchase. For properties that need significant repairs, the FHA 203(k) renovation loan allows you to finance both the purchase and the renovation in a single loan.
No. FHA loans are available to any qualified borrower purchasing a primary residence. Repeat buyers use FHA loans frequently, especially if their credit profile or savings level makes it a better fit than conventional financing.
FHA loan limits vary by county. In most areas, the standard limit is $498,257 for a single-family home. In high-cost areas, the limit can go as high as $1,149,825. Your loan officer can confirm the exact limit for the county where you are buying.

Ready to Explore FHA Loans?

Let our team walk you through the details, run the numbers for your situation, and help you decide if this is the right program for your goals.

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