FHA Mortgage

What is a FHA Mortgage?

FHA loans are mortgages insured by the Federal Housing Administration. Because the government backs these loans, lenders can offer them to borrowers who might not qualify for conventional financing — including first-time homebuyers or those rebuilding their credit. FHA loans are particularly popular for their low down payment requirements and more lenient credit standards.

Who It's For

FHA loans are ideal for first-time homebuyers, buyers with lower credit scores (580+), or those who have limited savings for a down payment. They are also a great option for buyers who experienced financial hardship in the past and are working to rebuild their financial profile.

Key Benefits

• Down payment as low as 3.5% with a 580+ credit score
• Credit scores as low as 500 accepted (with 10% down)
• More flexible debt-to-income ratio requirements
• Sellers can contribute up to 6% of the purchase price toward closing costs
• Streamlined refinance option available in the future
• Available for 1–4 unit properties

Eligibility Requirements

• Minimum credit score of 580 for 3.5% down (500–579 requires 10% down)
• Debt-to-income ratio typically under 50%
• Primary residence only
• Property must meet FHA appraisal standards
• Upfront mortgage insurance premium (1.75% of loan amount) required
• Annual MIP applies for the life of the loan (if down payment < 10%)