Government-backed financing with low down payments and flexible credit requirements. Perfect for first-time homebuyers and those with limited savings or lower credit scores.
An FHA Loan is a mortgage insured by the Federal Housing Administration, a government agency under HUD. These loans are designed to make homeownership more accessible, especially for first-time buyers and those with less-than-perfect credit or limited savings.
FHA loans require as little as 3.5% down payment and accept credit scores as low as 580. The government insurance protects lenders against losses, allowing them to offer more favorable terms to borrowers who might not qualify for conventional financing.
Start your homeownership journey with just 3.5% down and flexible credit requirements.
Government-backed advantages that make homeownership achievable
Understanding the key differences to choose the right option
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Down Payment | 3.5% minimum | 3% minimum |
| Credit Score | 580 minimum (500 with 10% down) | 620 minimum |
| Mortgage Insurance | Required for loan life (1.75% upfront + 0.55% annual) | Required if <20% down (removable at 20% equity) |
| Debt-to-Income Ratio | Up to 50-55% | Up to 43% |
| Property Standards | Must meet FHA minimum standards | Standard appraisal requirements |
| Loan Limits | $498,257 - $1,149,825 (varies by area) | $766,550 - varies (conforming) |
| Gift Funds | 100% down payment allowed | Usually limited amounts |
The new forward mortgage loan limit in the table given below are effective for FHA case numbers assigned on or after January 1 , 2026.
| Property Size | Low Cost Area "Floor" | High Cost Area "Ceiling" |
|---|---|---|
| One-Unit | $541,287 | $1,249,125 |
| Two-Units | $693,050 | $1,599,375 |
| Three-Units | $837,700 | $1,933,200 |
| Four-Units | $1,041,125 | $2,402,625 |
Step-by-step guide to securing your FHA loan
Not all lenders offer FHA loans. Find an FHA-approved lender and get pre-qualified to understand your budget and borrowing power.
Submit full application with income documentation, tax returns, bank statements, and credit authorization. FHA loans require detailed verification.
Property must be appraised by FHA-approved appraiser and meet minimum property standards. More stringent than conventional appraisals.
Underwriter verifies all information and ensures loan meets FHA guidelines. May request additional documentation or explanations.
Receive final approval and proceed to closing. FHA requires specific closing disclosures. Once signed, you get your keys!
FHA loans are perfect for your first home purchase with low down payment options