What Are FHA Loans?

FHA loans are mortgage loans backed by the Federal Housing Administration. These loans are designed to make homeownership more accessible by offering more flexible qualification requirements.

Key Requirements

  • Minimum down payment of 3.5%
  • Minimum credit score of 500 (typically 580+ with most lenders)
  • Debt-to-income ratio typically between 45%–50% or lower
  • Loan-to-value ratio up to 96.5%
  • Loan limits vary by area
  • Mortgage insurance is required
  • Property must meet FHA appraisal and inspection standards

Mortgage Insurance

  • Upfront mortgage insurance premium (UFMIP) of 1.75% of the base loan amount
  • Monthly mortgage insurance is required on loans with less than 10% down for the life of the loan
  • Monthly mortgage insurance can be removed after 11 years if the down payment is 10% or more and the loan reaches 78% loan-to-value (LTV)

Eligible Property Types

  • Single-family homes (attached or detached)
  • 2–4 unit properties (must occupy one unit as primary residence)
  • Planned unit developments (PUDs)
  • FHA-approved condominiums
  • Manufactured homes (within FHA guidelines)

FHA loans have historically helped many buyers qualify for home financing who may not meet the stricter requirements of conventional loans.

Have questions about FHA loans? Contact us to learn more about your options and see if an FHA loan is right for you.