Government-backed mortgages with low down payments and flexible credit requirements
Just 3.5% down with credit scores of 580 or higher, or 10% with scores between 500-579. Makes homeownership accessible for more buyers.
Credit scores as low as 500 accepted, with alternative credit histories considered for borrowers with limited traditional credit.
Debt-to-income ratios up to 57% in some cases, helping borrowers with higher debt loads or lower incomes qualify.
FHA (Federal Housing Administration) loans are government-backed mortgages designed to make homeownership more accessible, particularly for first-time buyers, those with limited credit history, or borrowers who don't qualify for conventional financing. These loans are insured by the FHA, reducing lender risk and enabling more flexible qualification standards.
The primary advantage of FHA loans is the low down payment requirement - just 3.5% with credit scores of 580 or higher, or 10% with scores between 500-579. This makes homeownership possible for buyers who haven't saved the traditional 20% down payment required by many conventional loans.
Credit score requirements are more lenient than conventional loans, accepting borrowers with scores as low as 500 (with 10% down) or 580 (with 3.5% down). FHA also considers alternative credit histories for borrowers with limited traditional credit, looking at rent payments, utility bills, and other payment histories.
Debt-to-income ratio limits are more flexible, allowing up to 57% in some cases compared to the typical 43% for conventional loans. This flexibility helps borrowers with higher debt loads or lower incomes qualify for financing when they might not qualify elsewhere.
FHA loans require mortgage insurance premiums (MIP) both upfront (1.75% of loan amount) and annually (0.45-1.05% depending on loan-to-value ratio and term). For loans with less than 10% down originated after June 2013, MIP remains for the life of the loan, making refinancing to conventional the only removal option.
Property requirements include FHA appraisals that focus on safety, security, and structural soundness. Properties must meet minimum property standards, and certain property types like condos must be in FHA-approved projects. This protects buyers but can limit property choices in some markets.
FHA loans are assumable, meaning qualified buyers can take over your mortgage payments and terms when you sell. This can be a valuable selling feature if you have a low interest rate that's attractive to potential buyers in a higher-rate environment.
Dani helps navigate FHA loan requirements, identifies the best FHA lenders for your situation, and ensures your property and financial profile meet all FHA guidelines for smooth approval and closing.
Review your credit, income, and debt situation to determine FHA loan eligibility.
Get pre-approved with FHA-approved lenders for competitive terms and rates.
Find FHA-eligible properties that meet minimum property standards and your needs.
Required FHA appraisal focusing on safety, security, and structural soundness.
Complete your FHA loan closing and receive keys to your new home.
Let Dani help you navigate FHA loan requirements and secure affordable financing with low down payment options.