FHA loans, insured by the Federal Housing Administration, were created to make homeownership more accessible especially for first-time buyers, those with less-than-perfect credit, or buyers with limited down payment savings.
With an FHA loan, you can purchase a home with as little as 3.5% down if your credit score is 580 or above. Even buyers with credit scores as low as 500 may qualify with a 10% down payment. FHA guidelines also allow for higher debt-to-income ratios compared to conventional loans, meaning you may be able to qualify even with existing obligations like car payments or student loans.
Because the program is government-backed, lenders are more willing to approve borrowers who might be considered higher risk in conventional financing. This flexibility has made FHA loans a cornerstone of first-time homeownership for decades.
FHA loans do require mortgage insurance, an upfront premium (which can be rolled into the loan) and an annual premium paid monthly. Unlike conventional PMI, FHA mortgage insurance typically remains for the life of the loan unless you refinance into a different loan type once you’ve built equity.
Loan limits are set by county, with standard limits in most areas and higher limits in more expensive markets. FHA loans can also be used for certain 2–4 unit properties, allowing buyers to live in one unit and rent out the others to offset housing costs.
If you have limited cash for a down payment, are recovering from past credit issues, or simply want the stability of a government-insured loan, FHA financing could be your fastest path to homeownership. We can walk you through the qualification process, run payment scenarios, and help you compare FHA to other programs to find your most affordable option.
