FHA Loans
The most accessible path to homeownership. Buy a home with just 3.5% down and more flexible credit requirements than conventional loans.
Who Qualifies?
FHA loans are insured by the Federal Housing Administration, which minimizes the lender's risk. Because of this backing, lenders can offer looser qualification standards.
- Credit ScoreBorrowers with a score of 580 or higher qualify for the 3.5% down payment. Scores between 500-579 require a 10% down payment.
- Debt-to-Income (DTI)FHA is very forgiving with DTI ratios, often allowing up to 50% or even 57% with compensating factors.
- Property RequirementsMust be your primary residence. The property must pass a specific FHA appraisal ensuring it is safe, sound, and structurally secure.
Key Benefits
Low Down Payment
Just 3.5% down, and 100% of it can come from a gift from a family member.
Better Interest Rates
Because the loan is government-backed, FHA interest rates are often lower than conventional rates.
Shorter Waiting Periods
Qualify much sooner after major credit events like bankruptcy or foreclosure.
The Trade-off: Mortgage Insurance
To fund the program and protect lenders, FHA requires two types of Mortgage Insurance Premiums (MIP). Unlike conventional loans, FHA MIP cannot be cancelled once you reach 20% equity if you put down less than 10%.
Upfront MIP
1.75% of the loan amount. This is almost always rolled directly into the loan balance, so you don't pay it out of pocket at closing.
Annual MIP
Typically 0.55% of the loan amount per year, divided by 12 and added to your monthly payment.