A lower-down-payment path with more flexible credit guidelines.
FHA Loans
FHA loans, insured by the Federal Housing Administration, are the go-to choice for buyers who want a low down payment and flexible credit requirements. With just 3.5% down and a 580 credit score, homeownership becomes attainable for millions of Americans who might not qualify for conventional financing.
Because the FHA insures the lender against default, banks and mortgage companies can offer more favorable terms to borrowers with less-than-perfect credit or limited savings. That backing comes at a cost: mortgage insurance premiums. But for many buyers, the tradeoff is well worth it.
Eligibility at a Glance
Credit Score
580+ for 3.5% down · 500–579 requires 10% down
Down Payment
As low as 3.5% with 580+ score
Debt-to-Income
Up to 50% with compensating factors (43% preferred)
Loan Limit (2026)
Up to $541,287 in most counties; higher in high-cost areas
Property Requirement
Primary residence only; must meet FHA minimum standards
Mortgage Insurance
Upfront MIP (1.75%) + annual MIP for the life of the loan (if < 10% down)
Guidelines reflect FHA standards. Lender overlays may apply. Contact Jake for a personalized assessment.
Key Benefits
- ✓One of the lowest down payments available at just 3.5%
- ✓More lenient credit score requirements than conventional loans
- ✓Higher DTI limits help buyers with existing debt qualify
- ✓Gift funds accepted for entire down payment and closing costs
- ✓Available to first-time and repeat buyers alike
- ✓FHA Streamline Refinance option with minimal documentation
Things to Consider
- ·Mortgage Insurance Premium (MIP) for the life of the loan if you put less than 10% down
- ·Loan limits lower than conventional in many markets
- ·Property must meet FHA appraisal standards (can complicate fixer-upper purchases)
- ·Primary residence only; investment properties and second homes don't qualify
- ·Upfront MIP of 1.75% added to loan balance at closing
Common Questions
Is FHA only for first-time buyers?
FHA loans are available to any qualified borrower purchasing a primary residence. While they're popular with first-time buyers due to the low down payment, repeat buyers and those who've owned before can also use them.
Can I get rid of FHA mortgage insurance?
If you put less than 10% down, MIP stays for the life of the loan. The most common exit strategy is refinancing into a conventional loan once you've built 20% equity, which often saves significant money long-term.
What credit score do I actually need?
FHA allows scores as low as 500 (with 10% down), but most lenders, Jake included, work with borrowers at 580+. If your score is below 580, we can map out a plan to get you there.
What's an FHA Streamline Refinance?
A fast-track refinance exclusively for existing FHA borrowers. It requires minimal documentation, no new appraisal in most cases, and no income verification, making it one of the easiest refinances available when rates drop.
Is an FHA Loan Right for You?
An FHA loan is often the best fit if you:
- Have a credit score between 580–679 (or are working to rebuild credit)
- Have limited savings and need a down payment under 5%
- Carry higher monthly debt obligations that affect your DTI
- Plan to use gift funds from family to help with costs
- Are buying a primary residence in a mid-range price market
Let's see if FHA is your best path.
Jake will walk through your full credit profile, income, savings, and goals to determine whether an FHA loan or another program puts you in the best position.