FHA Loans
FHA loans are insured by the Federal Housing Administration and designed to help borrowers with lower credit scores or limited funds for down payment. These government-backed loans are particularly popular with first-time homebuyers.
Key Features of FHA Loans
Low Down Payment
FHA loans require as little as 3.5% down payment for borrowers with credit scores of 580 or higher.
Flexible Credit Requirements
Borrowers with credit scores as low as 500 may qualify with a 10% down payment, making homeownership more accessible.
Government-Backed
FHA loans are insured by the Federal Housing Administration, providing lenders with added security to offer more favorable terms.
Benefits & Requirements
Benefits of FHA Loans
- Lower down payment requirements (as low as 3.5%)
- More flexible credit score requirements
- Higher debt-to-income ratios may be accepted
- Competitive interest rates
- Assumable by qualified buyers
- Streamlined refinance options available
FHA Loan Requirements
- Minimum credit score of 580 for 3.5% down payment
- Minimum credit score of 500 for 10% down payment
- Debt-to-income ratio typically below 43%
- Property must be your primary residence
- Property must meet FHA minimum property standards
- Mortgage insurance premium required
Understanding Mortgage Insurance Premium (MIP)
All FHA loans require mortgage insurance, which protects lenders if a borrower defaults on their loan.
Upfront MIP (UFMIP)
- 1.75% of the base loan amount
- Can be financed into the loan amount
- Paid at closing or included in loan
- One-time payment
Annual MIP
- 0.55% to 1.05% of loan amount annually
- Rate varies based on loan amount, term, and LTV ratio
- Paid monthly as part of mortgage payment
- Required for the life of the loan in most cases
Note: For loans with terms greater than 15 years and LTV ratios of 90% or less, MIP is required for 11 years. For all other loans, MIP is required for the life of the loan.
As a first-time homebuyer with a limited down payment and a credit score that wasn't perfect, I was worried about getting approved for a mortgage. Mariana at GetTheMortgage.com walked me through the FHA loan process step by step. Thanks to her expertise, I was able to get approved and now own a home I love!
Frequently Asked Questions
Can I get an FHA loan if I've had a bankruptcy or foreclosure?
Yes, it's possible to qualify for an FHA loan after bankruptcy or foreclosure, but you'll need to wait for a specific waiting period. For Chapter 7 bankruptcy, the waiting period is generally 2 years from discharge date. For Chapter 13 bankruptcy, you may qualify after 12 months of on-time payments with court approval. After a foreclosure, the waiting period is typically 3 years.
What types of properties can I buy with an FHA loan?
FHA loans can be used to purchase single-family homes, 2-4 unit properties (as long as you live in one unit), condominiums in FHA-approved projects, and manufactured homes that meet FHA requirements. The property must be your primary residence, not an investment property or second home.
How long do I have to pay mortgage insurance on an FHA loan?
For FHA loans with a loan-to-value (LTV) ratio greater than 90% at origination, you'll pay mortgage insurance for the life of the loan. For loans with an LTV ratio of 90% or less (down payment of 10% or more), you'll pay mortgage insurance for 11 years. The only way to remove FHA mortgage insurance before these timeframes is to refinance into a conventional loan once you have sufficient equity.
What are the FHA loan limits?
FHA loan limits vary by county and are based on local housing costs. In 2025, 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. These limits are updated annually. Contact us for the specific loan limits in your area.
Can I use gift funds for my down payment?
Yes, FHA loans allow 100% of the down payment to come from gift funds provided by family members, employers, charitable organizations, or government agencies. The gift must be properly documented with a gift letter stating that no repayment is expected.
Ready to Get Started with an FHA Loan?
Our team at GetTheMortgage.com is ready to help you navigate the FHA loan process. Apply now to begin your homeownership journey.
All loans subject to credit and property approval. Rates, fees, and terms are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. First Community Mortgage, Inc. NMLS# 629700 | Mariana Rawlins, VP/Branch Manager, NMLS# 1873354 | Equal Housing Lender.