low down. wide open.
FHA loans are insured by the Federal Housing Administration and built specifically to get more people into homes — first-time buyers, folks with a bumpy credit chapter, and buyers whose savings account is closer to "starting out" than "trust fund." 3.5% down, credit as low as 580, and gift funds are welcome.
The loan that says yes when others say maybe
FHA is the answer when a conventional lender squints at your file and asks for another year of seasoning. Bankruptcy two years back? FHA is fine with that. Credit in the 580s? Still eligible. Down payment coming from a family member? Gift letter, done.
It's not a starter loan you have to graduate from — plenty of buyers stay in FHA for the full 30 years. But because mortgage insurance is permanent, most folks refinance into a conventional loan once they've built equity and their credit has healed up.
About that mortgage insurance
Every FHA loan comes with two mortgage insurance premiums: an upfront one (currently 1.75% of the loan, usually rolled into the balance) and an annual one (around 0.55% for most buyers, split into your monthly payment). It's the price of the easier qualifying rules.
Here's the important part: if you put less than 10% down, that annual MIP sticks around for the entire loan. That's why we walk every FHA borrower through the "when do we refinance?" question before you close, not after.
The appraisal has opinions
FHA appraisers don't just value the home — they inspect it. Peeling paint on a pre-1978 house, a missing handrail, exposed wiring, a roof with less than two years of life left: any of it can trigger required repairs before closing. It's not a full inspection (still get one of those), but it's stricter than a conventional appraisal.
Translation: FHA loves solid, move-in-ready homes. If you're eyeing a serious fixer-upper, ask about the FHA 203(k) rehab loan instead — same low down payment, but the repair budget is built into the mortgage.
Best fit if…
- ✓You're a first-time or return-to-market buyer
- ✓Your credit score is between 580 and 680
- ✓You have 3.5% down (from savings, gift, or grant)
- ✓Your debt-to-income runs a little high
- ✓You want a government-backed loan with clear rules
Buying your first home? First-time buyer? Start here →