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Buy

Buy with 3.5% down and credit that is still a work in progress.

FHA loans are insured by the Federal Housing Administration, which is why lenders can accept a 580 credit score, a 3.5% down payment that can be entirely a gift, and higher debt ratios than a conventional loan.

Minimum down3.5% with a 580+ score
Minimum credit580 (500 with 10% down)
Gift fundsAllowed for the full down payment
Insured byFHA
See if I qualifyCall (800) 511-3330
4.4 on Google · 214 reviewsNMLS 13988Licensed in 15 states + DC
Who it's for

Is the FHA purchase loan right for you?

  • First-time buyers with limited savings
  • Buyers with a credit score between 580 and 680
  • Anyone whose down payment is coming from family
  • Borrowers with higher debt-to-income ratios
How it works

Three steps from here to closing.

Pre-approval

Credit, income and assets reviewed. FHA allows non-occupant co-borrowers, so a parent can help.

Offer and FHA appraisal

The appraiser also checks that the home meets FHA's minimum property standards.

Underwriting to closing

Upfront mortgage insurance is rolled into the loan; you bring 3.5% plus closing costs.

What you'll need

Requirements at a glance.

  • Credit score of 580 for 3.5% down (500 to 579 with 10% down)
  • Primary residence, one to four units
  • Two years of employment history
  • Debt-to-income ratio up to about 50% with compensating factors
  • Loan amount within the FHA limit for the county
Straight talk

The upside, and what to weigh.

Why people choose it

  • Lowest credit-score floor of any mainstream program
  • Down payment can be a gift, a grant or down payment assistance
  • Sellers can contribute up to 6% toward closing costs

Things to consider

  • Mortgage insurance runs for the life of the loan at 3.5% down
  • Property must meet FHA condition standards, so some fixer-uppers need a 203k instead
Common questions

Asked on almost every first call.

Can I use FHA more than once?

Yes, as long as the new home will be your primary residence and you meet the guidelines again.

What does mortgage insurance cost?

An upfront premium financed into the loan plus a monthly premium. Once you reach 20% equity, refinancing to a conventional loan removes it.

Are FHA rates higher?

Usually a little lower than conventional for the same borrower. The insurance is what makes the total cost higher for strong-credit buyers.