FHA home loan guide
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration. Because the government insures part of the loan, lenders can offer more flexible credit and down payment requirements than most conventional financing.
It's not a loan from the government -- it's a loan from a private lender, with FHA insurance reducing the lender's risk. That's what makes it more accessible to buyers who don't have perfect credit or a large down payment saved up.
Why buyers choose it.
Down payments as low as 3.5%
Available with a credit score of 580 or higher.
Gift funds allowed
Down payment can come from family or an approved source.
Assumable loans
A future buyer may be able to take over your FHA loan and rate
Flexible credit requirements
Scores as low as 500 may qualify with a larger down payment.
Renovation financing available
The 203(k) program rolls repair costs into your mortgage.
Widely available
Most lenders offer FHA financing, so shopping around is easy.
Top 10 questions about FHA loans
1. What is an FHA loan?
A mortgage insured by the Federal Housing Administration. Government insurance on part of the loan lets lenders offer more flexible credit and down payment terms than most conventional loans.
2. How much down payment do I need for an FHA loan?
As little as 3.5% down with a credit score of 580 or higher. Borrowers with scores between 500 and 579 may still qualify with 10% down.
3. What credit score do I need for an FHA loan?
FHA guidelines allow scores as low as 500 with a larger down payment, and 580 for the minimum 3.5% down payment option -- making it one of the most accessible programs for buyers rebuilding credit.
4. What is FHA mortgage insurance premium (MIP)?
Mortgage insurance required on all FHA loans regardless of down payment size. It includes an upfront premium at closing plus an annual premium paid monthly, and in most cases it stays for the life of the loan.
5. Can I remove FHA mortgage insurance later?
In most cases, no -- if your down payment was under 10%, MIP typically stays for the life of the loan. The most common way to remove it is refinancing into a conventional loan once you've built enough equity.
6. What is the maximum FHA loan amount?
FHA loan limits vary by county and are updated annually based on local home prices. Your loan officer can confirm the current limit for the specific area you're buying in.
7. Can I use an FHA loan for a fixer-upper?
Yes. The FHA 203(k) loan lets you finance the purchase price and renovation costs in a single mortgage -- useful for homes that need significant repair work.
8. Can I use an FHA loan more than once?
FHA loans are generally intended for primary residences, and most borrowers can only have one at a time. There are limited exceptions, like relocating for work or a change in family size.
9. How is an FHA loan different from a conventional loan?
FHA loans generally have more flexible credit requirements and lower down payment minimums, but require mortgage insurance for the life of the loan in most cases. Conventional loans can be stricter on credit but let you remove mortgage insurance once you reach 20% equity.
10. How long does it take to close on an FHA loan?
Most FHA loans close in about 30 to 45 days, similar to conventional financing, though required appraisal standards can occasionally add time if repairs are needed first.