FHA Loans: Affordable Home Financing Made Simple
FHA loans are designed to help families and first-time buyers get into
homes with lower down payments and more flexible credit rules.
Why FHA Loans Make Homeownership Easier
FHA loans are designed to lower the barriers to buying a home.
3.5% Down
Unlike some conventional loans, FHA only requires a tiny down payment, which can even be gifted by family members.
Credit Friendly
Have a score in the 580s? FHA is often the most viable path to approval when traditional banks turn you away.
Seller Concessions
FHA allows sellers to pay up to 6% of your closing costs, meaning you could move in with very little cash out of pocket.
FHA Eligibility Guidelines
The Federal Housing Administration sets these
rules to ensure affordable lending.
FHA Eligibility Guidelines
The Federal Housing Administration sets these rules to ensure affordable lending.
1 Credit Score
A score of 580 or higher qualifies for the 3.5% down payment. (Scores 500-579 require 10% down).
2 Income Stability
FHA loans offer flexible income guidelines, allowing multiple income sources to help more buyers qualify.
3 Debt-to-Income (DTI)
Ideally 43% or lower, but FHA is famous for allowing ratios as high as 50% or 57% with compensating factors.
4 Primary Residence
For purchases, FHA loans are for primary residences only. However, existing FHA loans may be refinanced on investment or second homes.
5 FHA Appraisal
The home must meet minimum safety and habitability standards, but FHA 203(k) loans allow buyers to finance repairs and improvements to meet those standards.
6 Insurance (MIP)
FHA requires an upfront and monthly Mortgage Insurance Premium (MIP) for the life of the loan.
7 Down Payment Assistance
FHA loans work with many down payment assistance programs, helping reduce upfront costs for qualified buyers.
Mortgage Payment Calculator
Estimate your monthly mortgage payment using home price, down payment, interest rate, and loan term. Get a quick principal and interest estimate for your home buying budget.
Frequently Asked Question
Gather these documents to speed up your
pre-approval process.
What is the minimum credit score for a conventional loan?
There is no standard minimum credit score set by Fannie Mae or Freddie Mac. Approval is based on the full loan profile, and some borrowers may qualify without a traditional credit score.
How much down payment is required for a conventional loan?
Conventional loans can require as little as 3% down for qualified first-time buyers. Repeat buyers usually put down 5% to 20%, depending on the loan structure and financial profile.
Does a conventional loan require private mortgage insurance (PMI)?
Yes, if you put down less than 20%, PMI is required. The good news is that PMI can be removed once you reach 20% equity in your home, lowering your monthly payment.
Can I use a conventional loan for an investment property?
Yes. Conventional loans can be used for primary residences, second homes, and investment properties (1–4 units). FHA loans, by contrast, are limited to primary residences only.
How does a conventional loan compare to an FHA loan?
Conventional loans are typically better for borrowers with strong credit and lower debt. They often have lower lifetime costs and allow PMI removal. FHA loans may be more suitable for borrowers with lower credit scores or smaller down payments.
Your first home starts right here.
Our FHA specialists guide you through the process,
from credit repair tips to finding the right
down-payment assistance programs.
MLO License Info: NMLS# 1621958, NH Broker license # 1621958MBRR, and MA Broker license # MB1621958, ME Broker License # 1621958, FL Broker License MBR4542 Copyright Nextgen Mortgage Inc. All Rights Are Reserved
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