FHA LOANS
Make Homeownership
More Accessible
Buying a home may be closer than you think.
FHA loans are designed to make home financing more accessible for qualified buyers by offering flexible qualification guidelines and a lower down payment option compared with many traditional mortgage programs.
Whether you’re purchasing your first home, rebuilding your credit, or simply exploring your financing options, an FHA loan may provide a practical path toward homeownership.
What Is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development.Because the loan is federally insured, approved mortgage lenders may be able to provide financing to qualified borrowers with more flexible down payment and credit requirements than certain conventional mortgage programs.FHA loans can be used to purchase or refinance a qualifying primary residence.
Why Consider an FHA Loan?
Lower Down Payment
Qualified borrowers may be able to purchase a home with as little as 3.5% down, making FHA financing attractive to buyers who may not have a large amount of cash available upfront.
Flexible Credit Guidelines
FHA loans may provide additional flexibility for borrowers whose credit history makes qualifying for certain conventional mortgage programs more challenging.
Gift Funds May Be Accepted
Depending on FHA requirements and lender guidelines, qualifying gift funds and certain down payment assistance sources may be used toward eligible homebuying expenses.
Multiple Property Types
FHA financing isn't limited to traditional single-family homes. Certain approved condominiums, townhomes, manufactured homes, and qualifying multi-unit properties may also be eligible.
Who Could Benefit From an FHA Loan?
An FHA mortgage may be worth considering if you:
- Are purchasing your first home
- Have limited funds available for a down payment
- Have less-than-perfect credit
- Want more flexible qualification guidelines
- Plan to use the property as your primary residence
- Are looking for financing for an eligible 1–4 unit property
- Want to compare FHA financing with conventional loan options
You do not necessarily need to be a first-time homebuyer to qualify for FHA financing.
FHA Loan Qualification Factors
Every borrower’s financial situation is different. When evaluating an FHA loan application, lenders may consider factors including
Credit History
Your credit profile and payment history help lenders evaluate your ability to manage mortgage payments.
Income & Employment
Lenders generally review your income, employment history, and other documentation to determine whether the mortgage payment is sustainable.
Debt-to-Income Ratio
Your existing monthly debts are compared with your qualifying income as part of the mortgage approval process.
Down Payment
Eligible borrowers may qualify with a minimum required investment starting at 3.5%, depending on the borrower's qualifications and applicable program requirements.
Property Requirements
The property must meet applicable FHA eligibility, appraisal, safety, security, and soundness requirements.
Properties That May Qualify
FHA financing may be available for several types of primary residences, including:
Single-Family Homes
A traditional detached home intended to be your primary residence.
Approved Condominiums
Certain condominium properties that meet applicable FHA requirements.
Townhomes
Eligible attached residential properties may qualify depending on the property and loan structure.
2–4 Unit Properties
FHA financing can potentially be used for qualifying multi-family properties with up to four units when applicable occupancy requirements are satisfied.
Manufactured Homes
Certain manufactured housing may qualify when the property meets FHA and lender requirements.
Understanding FHA Mortgage Insurance
FHA loans generally include mortgage insurance. Mortgage insurance helps protect the lender in the event that a borrower defaults on the mortgage and is an important part of how the FHA loan program operates.
Upfront Mortgage Insurance Premium
An upfront mortgage insurance premium is generally associated with FHA financing and may often be incorporated into the mortgage amount, subject to applicable guidelines.
Annual Mortgage Insurance Premium
An annual mortgage insurance premium may also apply and is generally collected as part of the borrower's monthly mortgage payment.
FHA Loan Limits
FHA establishes maximum mortgage amounts each year.
The amount you may be able to finance depends on factors such as:
- The county where the property is located
- The number of units in the property
- Current FHA loan limits
- Your financial qualifications
- The property's purchase price and appraised value
Because FHA loan limits can change, we can help you determine the current limit applicable to the property you’re considering.
FHA Loan vs. Conventional Loan
Choosing between FHA and conventional financing depends on your individual financial situation.
FHA Loan
- Lower minimum down payment may be available
- More flexible credit guidelines may apply
- FHA mortgage insurance applies
- Primary residence requirements generally apply
- FHA property requirements apply
Conventional Loan
- Down payment options vary
- Credit requirements may be more restrictive depending on the program
- Mortgage insurance requirements depend on loan-to-value and program
- Primary residences, second homes, and investment properties may have financing options
- Property requirements vary by lender and program
There is no single mortgage program that is right for everyone. Reviewing both options can help determine which financing structure better fits your situation.
How the FHA Loan Process Works
01
Initial Consultation
We start by discussing your homebuying goals, budget, financial situation, and available mortgage options.
02
Pre-Qualification
Your income, credit, assets, debts, and other financial information are reviewed to determine the financing options that may be available to you.
03
Find Your Home
Once you understand your financing range, you can move forward with greater confidence as you search for the right property.
04
Complete Your Loan Application
After selecting a property, the complete mortgage application and required documentation are submitted.
05
FHA Appraisal & Underwriting
The property and loan file are reviewed according to applicable FHA and lender guidelines.
06
Closing
After all loan conditions have been satisfied and final approval is received, you’ll complete the closing process and move toward becoming the owner of your new home.
Not Sure If FHA Is Right for You?
Every homebuyer has a different financial story.
Instead of trying to determine the right mortgage program on your own, let’s review your goals, budget, credit profile, and available financing options together.
We’ll help you understand how FHA financing compares with other mortgage programs so you can make an informed decision about your next step.
Frequently Asked Questions
Do I have to be a first-time homebuyer to get an FHA loan?
No. FHA financing is not exclusively for first-time buyers. Qualified repeat homebuyers may also be eligible.
How much do I need for a down payment?
Qualified borrowers may be eligible for a minimum required investment of approximately 3.5%, although the exact amount depends on your qualifications and the transaction.
Can I use an FHA loan for an investment property?
FHA financing is generally intended for a borrower’s primary residence. Certain qualifying multi-unit properties may be eligible when applicable occupancy requirements are met.
Does an FHA loan require mortgage insurance?
Yes. FHA-insured mortgages generally include applicable upfront and annual mortgage insurance premiums.
Can I use gift funds?
Eligible gift funds may be permitted toward certain homebuying costs when they meet applicable FHA documentation and eligibility requirements.
Can I refinance using an FHA loan?
FHA provides refinancing programs for eligible homeowners. The program available to you will depend on your existing mortgage and financial circumstances.