Loan Programs

FHA Loans

Government-backed financing designed to make homeownership accessible, even if your credit isn't perfect or your savings are thin.

It's also a little more forgiving than our conventional loans when it comes to debt and credit.

What Is an FHA Loan?

FHA is for all home buyers. It isn't a first-time-buyer program, though it does hold a lot of benefit for some first-time buyers. FHA loans are mortgages insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD). Because the government insures these loans against default, lenders can offer more flexible qualification guidelines than conventional loans typically allow, including lower credit scores, higher debt-to-income ratios, and smaller down payments. FHA loans also tend to be paired with a lot of down payment assistance programs.

The tradeoff is Mortgage Insurance Premium (MIP). Every FHA loan requires both an upfront MIP (1.75% of the loan amount, usually rolled into the loan) and annual MIP paid monthly. If you put less than 10% down, that monthly MIP stays for the life of the loan; it never cancels. That's the biggest difference between FHA and conventional, and it's something I always walk clients through so there are no surprises.

For a lot of people, the FHA loan is a great band-aid loan: it helps them get what they need now, and we can always improve their situation later.

Key Benefits

Low Credit Score Friendly

Qualify with a credit score as low as 580 with 3.5% down, or 500 with 10% down. FHA gives you a path to homeownership even if your credit has some bumps.

Just 3.5% Down

One of the lowest down payment options available. Gift funds from family are allowed for the entire down payment, so you don't need to use your own savings.

Flexible DTI Ratios

FHA allows debt-to-income ratios up to 56.99% with compensating factors. If you have steady income but existing debt, FHA is often more forgiving than conventional guidelines.

FHA Streamline Refinance Path

An FHA loan also sets you up for an FHA Streamline: a streamlined refinance with no income documentation and no appraisal.

Requirements

  • ✓ Credit Score: 580+ for 3.5% down. 500-579 requires 10% down.
  • ✓ Down Payment: 3.5% minimum with 580+ credit. Gift funds allowed for the full amount.
  • ✓ DTI Ratio: Up to 56.99% with compensating factors (strong reserves, residual income, etc.).
  • ✓ MIP: 1.75% upfront + annual MIP (0.55% for most loans). MIP is for life if down payment is under 10%.
  • ✓ Property: Must be a primary residence. No investment properties or second homes.

Who Is This For?

FHA loans are designed to open doors. They work especially well for:

  • → First-time homebuyers with limited savings or credit history
  • → Borrowers with credit scores between 580 and 680
  • → Anyone rebuilding credit after bankruptcy, foreclosure, or hardship
  • → Buyers using gift funds for their entire down payment and closing costs
  • → Buyers with higher DTI ratios who wouldn't qualify conventionally

Frequently Asked Questions

FHA loans are available with credit scores as low as 580 with 3.5% down, or 500 with 10% down. These are some of the most accessible loans available.
Mortgage Insurance Premium (MIP) is required on all FHA loans. If you put less than 10% down, MIP stays for the life of the loan. With 10%+ down, it drops off after 11 years.
An FHA Streamline is a streamlined refinance with no income documentation and no appraisal. To qualify, the new rate generally needs to be at least half a percent lower than your current rate, you must have made at least six payments on the existing loan, and at least 210 days must have passed since you closed on the original FHA loan.
Yes, but the condo complex must be on the FHA-approved list. I can help you check approval status before you make an offer.
Yes. FHA insures loans on manufactured homes when the home and the land setup meet HUD and lender guidelines. Generally the home needs to be built to HUD standards (typically June 15, 1976 or later), permanently attached to an acceptable foundation, and titled or taxed as real property, not personal property like a movable trailer. You can finance the home and land together, or in some cases a home already on an eligible leased lot, depending on the scenario. The property has to pass appraisal and any required foundation or engineer documentation. If you have a specific address or listing, I can walk through whether it is likely to work and what documentation we will need.
Often yes, if the new home will be your primary residence. FHA is for owner-occupied properties, so the house you buy with FHA needs to be where you will live. You can usually only have one FHA loan at a time, so if your current home already has an FHA mortgage, we either need a qualifying exception (such as a job-related move that meets HUD distance rules, or in some cases a home that no longer fits a growing family) or a plan to refinance or sell the existing FHA loan first. If you are keeping the old home as a rental, the lender will factor in both mortgages and any rental income on your application. Share your situation and I can outline what is realistic under FHA and the lenders I work with.
No, there are no income limits for FHA loans. However, there are loan limits that vary by county. Some down payment assistance programs do have income limits, so we will need to be careful if we pair the two together.
FHA allows the seller or other interested parties to contribute up to 6% of the lesser of the sales price or appraised value toward your allowable closing costs, prepaid items, discount points, and other buyer costs the program permits. Those funds generally cannot be used to cover your minimum required investment (down payment) except in the limited ways HUD allows. Whatever we negotiate in the contract has to match FHA rules and show correctly on your closing disclosure.

Think FHA might be your fit?

Let's run the numbers together. Apply online or schedule a call.

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