FHA Loans
Government-backed loans designed for first-time buyers and those with lower credit scores, featuring down payments as low as 3.5%.
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PROGRAM OVERVIEW
FHA loans are insured by the Federal Housing Administration and designed to make homeownership accessible to a broader range of borrowers. With more lenient credit requirements and lower down payment minimums than conventional loans, FHA financing is particularly popular among first-time homebuyers, borrowers rebuilding their credit, and those with limited savings for a down payment.
One of the biggest advantages of an FHA loan is the ability to qualify with a credit score as low as 580 with just 3.5% down, or even 500 with 10% down. FHA loans also allow higher debt-to-income ratios than many conventional programs, giving more borrowers a path to approval. Seller concessions of up to 6% of the purchase price are permitted, which can help cover closing costs.
FHA loans do require mortgage insurance premiums (MIP) — both an upfront premium of 1.75% of the loan amount and an annual premium that is paid monthly. For loans with less than 10% down, MIP is required for the life of the loan. While this adds to the monthly cost, the trade-off is significantly easier qualification requirements and access to competitive interest rates that are often lower than conventional loans for borrowers with moderate credit.
COMMON QUESTIONS
FHA Loans FAQ
NEXT STEPS
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