FHA Home Loans

What is an FHA Home Loan?

An FHA home loan is a government-backed mortgage insured by the Federal Housing Administration (FHA). It’s designed to help first-time buyers, those with lower credit scores, or those with limited savings qualify for a mortgage.

Because it’s backed by the government, lenders take on less risk—making it easier for more people to qualify.

FHA Home Loan Requirements

  • Credit Score: Minimum of 580 for 3.5% down (500–579 may qualify with 10% down)
  • Down Payment: At least 3.5% of the home’s purchase price
  • Steady Income & Employment: Proof of reliable income for the past 2 years
  • Debt-to-Income Ratio (DTI): Generally below 43%, sometimes allowed up to 50%
  • Property Must Be Primary Residence: FHA loans are for owner-occupied homes only
  • Mortgage Insurance: Required both upfront (UFMIP) and monthly (MIP)

Why Choose an FHA Loan?

  • Easier to qualify than conventional loans
  • Lower credit scores accepted
  • Lower down payment requirements
  • Great for first-time homebuyers
  • More flexible on past credit issues (like bankruptcy or foreclosure)

Down Payment Options for FHA Loans

  • 3.5% down: With a credit score of 580 or higher
  • 10% down: If your credit score is between 500–579
  • Gift funds: Down payment and closing costs can be gifted by family or eligible sources

Types of FHA Home Loans

  • FHA Purchase Loan: Standard loan to buy a home with a low down payment
  • FHA Refinance Loan: Refinance an existing FHA or conventional mortgage into better terms
  • FHA 203(k) Renovation Loan: Combines the cost of buying and renovating a home into one loan
  • FHA Streamline Refinance: Simplified refinance process for current FHA borrowers
  • FHA Energy Efficient Mortgage (EEM): Helps finance energy-saving upgrades with your FHA loan

Benefits of FHA Home Loans

  • Low Down Payment Requirements
  • Easier Credit Qualifications
  • More Lenient on Credit History
  • Allows Gift Funds and Seller Contributions
  • Fixed and Adjustable-Rate Options

Contact us today to explore mortgage solutions and secure the best rates.