FHA Home Loan

A favorite among first time buyers.

A long-running and popular option for homebuyers, an FHA home loan is mortgage loan backed by the Federal Housing Administration (FHA)  that allows for smaller down payments. FHA loans also feature less-stringent qualifying criteria such as flexible income and credit guidelines.

The FHA does require borrower-paid mortgage insurance. The Mortgage Insurance Premium (MIP) can be financed into the loan amount.


FHA loan advantages:
  • You can make a smaller down payment than with conventional loans. 
  • You may be eligible to secure a down payment in the form of a community second mortgage. This second mortgage allows buyers to purchase a home with less of a down payment.
  • Credit score and cash reserve requirements are relaxed compared to conventional loans.
  • You may be able to secure a lower interest rate than a conventional loan with similar borrower credit characteristics.


FHA loan disadvantages:
  • Mortgage insurance is required.
  • The house must meet FHA's standards for occupancy—which means it might not be the best option for a "fixer-upper".


Frequently asked questions:

What types of homes meet FHA loan requirements?

Properties approved for an FHA loan need to meet minimum property standard requirements that cover structural soundness, security, and safety. Property types that may qualify include primary residences, single- and multi-family properties, condos, manufactured homes, and townhomes.

What are the qualifications for an FHA loan?

Not all applicants will qualify or an FHA loan. According to the FHA Loan Requirements in 2022, applicants must meet the following requirements, however additional requirements and/or conditions may apply. Ask for details.

  • FICO® score at least 580 = 3.5% down payment
  • FICO® score between 500 and 579 = 10% down payment
  • MIP (Mortgage Insurance Premium ) is required
  • Debt-to-Income Ratio < 43%
  • The home must be the borrower's primary residence
  • Borrower must have steady income and proof of employment.
Can you pay an FHA loan off early?

Yes. The Department of Housing and Urban Development's (HUD) Lender's Guide advises that a borrower may pay all or part of a mortgage off before the term ends.

What is a first-time homebuyer?

HUD’s first-time homebuyer definition in the HUD HOC Reference Guide outlines the criteria below:

  • An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).
  • A single parent who has only owned with a former spouse while married.
  • An individual who is a displaced homemaker and has only owned with a spouse.
  • An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
  • An individual who has only owned a property that was not in compliance with state, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.
How long does it take to get an FHA loan?

FHA loans could take 15-60 days to close, but the average range is 30-45.

Interested in this loan?