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Federal Housing Administration (FHA)

Federal Housing Administration (FHA) loans are mortgages insured by the FHA and issued by approved private lenders. They are designed to support low- to moderate-income borrowers who may find it challenging to qualify for conventional mortgages. Because these loans are government-backed, lenders are protected against defaults, allowing for more flexible credit requirements and lower down payment options compared to many traditional loans.

If you are a veteran or an active-duty service member, you may also qualify for a Veterans Administration (VA) home loan, which offers the benefit of low or even no down payment—making homeownership more accessible for those who have served.

Requirements & Qualifications

  • Credit score of 580 or higher (3.5% down) or 500–579 (10% down)
  • Two years of consistent income and employment history
  • Debt-to-income ratio under 50%
  • Minimum down payment of 3.5%
  • Cash reserves for upfront mortgage insurance and closing costs

Property Requirements

  • The home must be your primary residence; second homes and investment properties do not qualify.
  • The home must meet FHA minimum property standards for safety, security, and structural integrity.
  • Must be appraised by an FHA-approved appraiser.
  • You must move in within 60 days of closing.

Benefits of FHA Loans

  • Qualify despite less-than-perfect credit scores or credit history issues.
  • Down payment as low as 3.5%, which can be funded via gift or loan.
  • Approval possible 2–3 years after bankruptcy or foreclosure.
  • Assumable mortgage allows selling your home if interest rates rise.
  • FHA 203K program allows additional funding for repairs and renovations.

FHA Loan Types

  • Fixed-Rate: Most common FHA loan; interest rate stays the same over the life of the mortgage.
  • Adjustable-Rate (ARM): Monthly payments vary based on interest rate changes after initial fixed period. Rates may be lower initially but can increase over time.
  • Home Equity Conversion Mortgage: For those 62+, lets you access equity for cash while remaining in your home.
  • 203(k) Mortgage: Includes extra funds for certain repairs and renovations.
  • Energy Efficient Mortgage Program: Provides funds for energy-saving home improvements like insulation, solar, or wind systems.
  • Section 245(a) Loan: Graduated Payment Mortgage for homebuyers expecting income growth, with initially lower payments increasing over time. Only for primary single-family homes.

Expert Help

Our experienced loan consultants will take the time to understand your needs and guide you through the FHA loan process with personalized support.