FHA Loans

All About FHA Loans

What is an FHA loan?

FHA loans make homeownership possible and easier for low- to moderate-income borrowers who may not otherwise be able to get financing because of a lack of or a poor credit history, or because they have limited savings. Those who qualify for an FHA loan require a lower down payment. And the credit requirements aren’t nearly as strict as other mortgage loans—even those with credit scores below 580 may get financing. These loans are not granted by the FHA itself. Instead, they are advanced by FHA-approved lenders.

FHA Loan Qualification Requirements

The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved lenders. FHA insures these loans on single family and multi-family homes in the United States and its territories. It is the largest insurer of residential mortgages in the world, insuring tens of millions of properties since 1934 when it was created. FHA Loans require the following:

  • ◉ A FICO® score at least 580 = 3.5% down payment.
  • ◉ A FICO® score between 500 and 579 = 10% down payment.
  • ◉ A MIP (Mortgage Insurance Premium).
  • ◉ A Debt-to-Income Ratio less than 43%.
  • ◉ A The home must be the borrower's primary residence.
  • ◉ A The borrower must have steady income and proof of employment.

FHA Loan Limits

For 2022, the FHA floor was set at $420,680 for single-family home loans. This minimum lending amount covers most U.S. counties. The FHA ceiling represents the maximum loan amount and is illustrated in the table below. The FHA ceiling was set at $970,800 for single-family home loans.

An FHA loan is ideal for:

  • ◉ Those with stable full-time jobs that provide regular, consistent paystubs
  • ◉ Self-employed people with three or more years of consistent, reliable income
  • ◉ Married couples with moderate to high household income and little debt

FHA loans are not limited to first-time homebuyers, but they are meant to help borrowers with limited or spotty credit histories. By design, their eligibility requirements are less stringent than what you'd find with many conventional mortgages that are not backed by government agencies.

Need an FHA loan? Fill out the form and let's get you started.

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