Lower entry point
Qualified buyers may be able to begin with 3.5% down.
FHA HOME LOANSCompare FHA loans.
Compare FHA loans.
Review the down payment, mortgage insurance, and property rules.
FHA financing can reduce the down payment requirement for qualified buyers. Compare mortgage insurance, property requirements, cash to close, and the complete monthly payment before choosing the loan.
Compare FHA loans. Review the down payment, mortgage insurance, and property rules.
An FHA loan is a mortgage made by an approved private lender and insured by the Federal Housing Administration. The insurance helps lenders offer financing with a smaller down payment and more flexible credit guidance than some other mortgage paths.
That flexibility does not remove mortgage approval. Income, employment, credit history, debts, funds to close and the ability to repay still matter. The property must also support the loan through an FHA appraisal and applicable condition requirements.
FHA can be especially useful when cash is the first constraint. The best comparison puts the upfront mortgage insurance premium, monthly mortgage insurance, rate, taxes, insurance and future plans beside the initial down payment.
FHA loan benefits and requirements.
Flexible review
Credit history is reviewed as a pattern, not only as one number.
Broad home search
Eligible one to four unit primary residences may be considered.
Assumable feature
A future qualified buyer may be able to assume an existing FHA loan.
FHA qualification depends on both the buyer and the home.
FHA is built for a primary residence. A single family home, eligible condominium, manufactured home or two to four unit property may fit, but each property type brings its own review.
The appraisal considers value and applicable FHA property standards. A buyer selected inspection serves a different purpose and gives the buyer a deeper condition review.
Primary residence
The borrower generally occupies the home as a principal residence.
Condition and value
The appraisal supports value and reviews applicable property requirements.
Condominium review
The unit and project may need to meet FHA eligibility standards.
Future repairs
Eligible renovation financing can be compared when the property needs work.
CASH AND MONTHLY COSTStart prequalification →
A smaller down payment does not mean a smaller total cost.
FHA loans generally include an upfront mortgage insurance premium. The premium may often be financed, which raises the loan balance. Annual mortgage insurance is typically paid through the monthly payment.
A useful comparison tests the FHA payment against Conventional financing using the same home price, term and timing. Include the rate, mortgage insurance, cash to close and how long you expect to keep the loan.
How the loan process works.
Start with prequalification
Review income, debts, available cash and the homebuying goal.
Compare the complete payment
Put mortgage insurance, taxes and homeowners insurance beside principal and interest.
Confirm the property
Review home type, condition, value and any project requirements.
Complete underwriting
Document the borrower, funds, appraisal and complete transaction.
Close with reserves intact
Confirm cash to close and the money that remains after the move.
Compare FHA with other loans.
DecisionFHAConventional
Down payment
May begin at 3.5% for qualified buyers
May begin at 3% for certain programs
Mortgage insurance
Upfront and monthly mortgage insurance generally apply
PMI may apply below 80% loan to value
Occupancy
Eligible primary residence
Primary, second home and investment paths
Property review
FHA appraisal and property requirements
Appraisal plus applicable property review
Questions buyers ask about FHA loans.
Is FHA only for first time buyers?+
No. FHA financing is not limited to first time buyers. Eligibility depends on the borrower, property, occupancy and complete transaction.
What is the minimum FHA down payment?+
Qualified borrowers may be able to purchase with 3.5% down. The final requirement depends on credit, approval, property and program rules.
Does FHA mortgage insurance go away?+
The duration depends on the loan terms, loan to value and applicable rules. Compare the expected insurance period before choosing the loan.
Can FHA finance a condominium?+
Potentially. The unit and condominium project must meet applicable FHA and lender requirements.
Is an FHA appraisal a home inspection?+
No. The appraisal supports the lending decision. A buyer selected inspection reviews condition in greater depth.
Can closing costs be paid with seller credits?+
Seller credits may be permitted within applicable limits. The contract, actual costs and loan approval determine how much can be used.
Can FHA financing be used for a home that needs repairs?+
Some properties may fit an eligible renovation structure. The scope, appraisal, contractor and program requirements need to be reviewed before relying on it.
COMPARE WITH YOUR NUMBERS
Compare FHA financing.
Start prequalification for a new purchase scenario, or enter the terms from an offer you already have.