The loan that says yes more often.
FHA financing is built for buyers who need more flexibility than a conventional loan offers: a thinner credit file, a past credit event, or a smaller down payment. It is government backed, widely available, and a popular route for first-time buyers.
Checking costs nothing and starts with no hard credit inquiry. Licensed in 39 states, rated 4.9 across 5,300+ Google reviews.
What your credit score opens
500 to 579
580 to 619
620 and above
FHA, 10% down
Still possible, with a larger down payment and a closer look at the file.
FHA, 3.5% down
The band FHA was built for. Conventional is usually out of reach here.
FHA or conventional
Both are open. We price them side by side and show you which costs less.
Lenders add their own minimums on top of the FHA floor, and some will not go below 580. We know which ones will.
What people get wrong about FHA.
More bad information circulates about this program than any other. Here is what is actually true.
Commonly heard
FHA loans are only for first-time buyers.
Actually
Any eligible buyer can use one, and more than once, as long as it is the home you will live in. FHA generally insures only one principal residence per borrower at a time, with limited exceptions such as a job relocation. First-time buyers are simply the largest group who use it.
Commonly heard
You need bad credit to get an FHA loan.
Actually
There is no maximum score. Plenty of borrowers with good credit choose FHA because the pricing works out better for them, particularly with a smaller down payment.
Commonly heard
Sellers refuse FHA offers.
Actually
That reputation comes from the appraisal, which checks the property meets minimum condition standards. On a sound house it is a non-event, and FHA loans close on normal timelines.
Commonly heard
The mortgage insurance never comes off.
Actually
With less than 10 percent down it lasts the life of the loan; with 10 percent or more it ends after 11 years. Either way it is a real cost, but it is not a trap: once your credit and equity improve, refinancing into a conventional loan removes it entirely once you qualify. Whether that refinance pays for itself depends on the new rate, the closing costs and how long you keep the loan, and we run that break-even with you.
Commonly heard
An FHA loan takes far longer to close.
Actually
The paperwork is comparable to conventional. Timelines slip when a lender rarely handles FHA files, not because of the program itself.
How the program works.
The Federal Housing Administration was created in 1934 to widen access to home ownership, and the job has not changed. The FHA does not lend you money. It insures the loan a private lender makes, and that insurance is why a lender can accept a lower credit score and a smaller down payment than it otherwise would.
You pay for that insurance in two parts. There is an upfront premium of 1.75 percent of the loan, which is normally financed into the balance rather than paid at closing, and an annual premium collected monthly. On most FHA loans today the annual premium stays for the life of the loan; put 10 percent or more down and it drops off after eleven years.
That ongoing cost is the trade. It buys you a door that would otherwise be shut, and it is not permanent in practice: when your credit and equity improve, a refinance into a conventional loan ends the insurance for good. Plenty of our clients follow exactly that path.
Built for the buyer the other programs turn away.
FHA loans exist so that a 600 credit score, a thin savings account or a recent rough patch does not keep you renting. A 3.5 percent down payment, flexible debt ratios and gift funds for the entire down payment are all standard.
The trade-off is mortgage insurance for the life of the loan at the minimum down payment, which is why many FHA borrowers refinance into a conventional loan later. We plan for that from day one.
Three ways to use an FHA loan.
Buying, lowering your rate, or reaching your equity. Your pro will tell you which you qualify for and what each costs.
Buying a home
FHA purchase loan
Down payments from 3.5 percent at a 580 score, or 10 percent between 500 and 579. Gift funds are allowed for the whole down payment, and sellers can contribute up to 6 percent toward your closing costs.
Lowering your rate
FHA Streamline refinance
For homeowners already in an FHA loan. Minimal paperwork, usually no appraisal, no income re-verification in most cases, and a closing that is often quicker than a full refinance.
Reaching your equity
FHA cash-out refinance
Borrow against your equity up to 80 percent of your home value, with the same forgiving credit standards that make FHA worth using in the first place.
What it takes to qualify.
The FHA sets the floor. Individual lenders add their own overlays on top, which is why the same file can be declined in one place and approved in another.
| Requirement | FHA rule | What lenders usually want | Notes |
|---|---|---|---|
| Credit score with 3.5% down | 580 | 580 to 620 | Some lenders will not go below 620 at all |
| Credit score with 10% down | 500 | 500 to 580, case by case | Fewer lenders participate this low |
| Down payment | 3.5 percent | Same | May be a documented gift in full |
| Upfront mortgage insurance | 1.75 percent of the loan | Same | Normally financed into the loan |
| Annual mortgage insurance | Charged monthly | Same | Life of loan, or 11 years with 10 percent down |
| Debt-to-income ratio | No single FHA cutoff; the qualifying ratio depends on credit, assets and the underwriting findings | Commonly up to 50 percent | More flexible than conventional for strong files |
| Occupancy | Primary residence | Same | No second homes or rentals |
| Property condition | Must meet minimum standards | Same | Checked at the FHA appraisal |
| After bankruptcy | 2 years from Chapter 7 discharge | Same, with clean credit since | Chapter 13 can qualify while still in the plan |
| After foreclosure | 3 years | Same | Shorter than most conventional waiting periods |
FHA rules and premium rates change from time to time, and lender overlays vary widely. This table is a starting point, not a commitment to lend. MortgagePros is not affiliated with, endorsed by, or acting on behalf of the Federal Housing Administration, HUD or any government agency.
A way in
FHA exists so a thin file or a rough patch does not keep you renting.
What would the payment be?
Pick FHA as the loan type and set the down payment to 3.5 percent of the price. The mortgage insurance line stays in the payment rather than falling away at 20 percent, which is the cost you are weighing against getting in sooner.
Why buyers choose it.
Six reasons an FHA loan gets people into a home that a conventional loan would not.
A smaller down payment
Three and a half percent of the price, and it can come entirely from a documented gift. On a $300,000 home that is $10,500 rather than $60,000.
Credit standards that bend
Scores from 580 with the standard down payment, and from 500 with ten percent down. A thin file or a short history is far less of an obstacle than it would be elsewhere.
A shorter wait after a setback
Two years after a Chapter 7 discharge and three after a foreclosure, which is quicker than conventional financing usually allows.
Room for more debt
FHA underwriting tolerates a higher debt-to-income ratio, so student loans or a car payment are less likely to end the conversation.
Help with closing costs
Sellers may contribute up to 6 percent of the price toward your costs, which is double what many conventional programs allow.
An easy exit later
Once your credit and equity improve, refinancing into a conventional loan removes the mortgage insurance. The FHA loan does not have to be permanent.
Find out if FHA is your way into a home.
A licensed pro checks your credit picture, down payment sources and price range, then shows you FHA beside the alternatives.
Is FHA the right choice for you?
It is the right answer for a lot of buyers and the wrong one for some. Here is the honest test.
A good fit if you want to
- Your credit score sits below about 620, where conventional pricing turns punishing
- You have 3.5 percent saved but not the 5 to 20 percent a conventional loan would want
- A bankruptcy or foreclosure has seasoned but is still recent enough to matter
- Your debt-to-income ratio is higher than conventional underwriting will accept
- Your down payment is coming from family as a gift
- You would rather buy now and refinance out of the insurance later than wait years
Probably not the right move if
- Your credit is above roughly 680, where a conventional comparison is worth pricing before you choose
- You can put 20 percent down, which avoids mortgage insurance altogether
- You are buying a second home or a rental, which FHA does not finance
- You are an eligible veteran: VA offers no down payment and no monthly mortgage insurance, so price it beside FHA before choosing
- The property needs significant repair and would not pass the FHA appraisal
The U.S. mortgage market right now.
National average rates from the Federal Reserve Bank of St. Louis FRED database: the Freddie Mac survey for conventional and the Optimal Blue indices for FHA and VA, shown as third-party market benchmarks, not MortgagePros pricing. FHA note rates often look lower than conventional, but the mortgage insurance is part of the real cost, so compare the full payment rather than the rate alone.
FHA 30-year fixed, U.S. average
7.18%
Conventional 30-year fixed, U.S. average
7.40%
VA 30-year fixed, U.S. average
7.09%
Sources: Freddie Mac Primary Mortgage Market Survey (conventional, 30-year national average, week of Oct 8, 2026) and Optimal Blue Mortgage Market Indices (FHA and VA, 30-year national averages as of Oct 8, 2026), distributed through FRED, Federal Reserve Bank of St. Louis; the figures and dates refresh automatically from the source. These are third-party market benchmarks, not MortgagePros rates and not an offer of credit. Your rate and APR depend on your credit, loan type, property and lock date.
FHA questions, answered.
The questions buyers ask us most about FHA financing. If yours is not here, a licensed pro will answer it directly, with no obligation.
What credit score do I need?
The FHA floor is 580 for a 3.5 percent down payment, and 500 with 10 percent down. Lenders set their own minimums above that, and many stop at 620. Part of our job is knowing which lenders actually work the lower end, rather than telling you no on behalf of the only one we deal with.
How much do I need for a down payment?
Three and a half percent of the purchase price at a 580 score or above. On a $300,000 home that is $10,500. The entire amount may be a gift from family, documented with a letter, so you do not necessarily need to have saved it yourself.
How does FHA mortgage insurance work?
Two parts. An upfront premium of 1.75 percent of the loan, normally financed into the balance rather than paid at closing, and an annual premium split across your monthly payments. With less than 10 percent down the annual premium stays for the life of the loan; with 10 percent or more it ends after eleven years.
Can I get rid of the mortgage insurance?
Not by paying down the balance, which is the main criticism of the program. You remove it by refinancing into a conventional loan once you have roughly 20 percent equity and the credit to qualify. For many borrowers that is two to five years, and the saving usually covers the refinance quickly. Does FHA mortgage insurance ever come off? walks through the rules.
Is there an FHA loan limit?
Yes, and it varies by county to reflect local prices. Higher-cost areas get a substantially larger limit. If the home you want sits above the limit for its county, we will look at conventional or jumbo financing instead and tell you what changes.
What is the FHA appraisal looking for?
Value, like any appraisal, plus a check that the property meets minimum standards: sound roof and structure, working heat, safe electrics and plumbing, no peeling paint on older homes, safe access. A well-kept house passes without drama. A neglected one may need repairs before closing.
Can I buy a rental or a second home?
No. FHA financing is for a home you intend to occupy. Two- to four-unit buildings do qualify if you live in one of the units, which is a practical way to start out as a landlord with very little down.
How soon can I buy after a bankruptcy or foreclosure?
Generally two years after a Chapter 7 discharge and three years after a foreclosure, provided your credit since has been clean. A Chapter 13 can sometimes qualify while you are still in the repayment plan with trustee approval. These waiting periods are shorter than conventional financing allows.
Is FHA or conventional cheaper?
It depends on your credit score, down payment and how long you keep the loan. FHA’s mortgage insurance does not change with your score; conventional’s does, and it can be cancelled as equity grows, which tends to favour FHA at lower scores and conventional at higher ones. The honest answer comes from pricing both, so we show you the whole payment and the total cost side by side before you choose.
What is an FHA Streamline refinance?
A simplified refinance for homeowners already in an FHA loan. Usually no appraisal, no income re-verification and very little paperwork, so it often closes faster than a full refinance. Your loan must be at least 210 days old with six on-time payments, and the new loan has to give you a real benefit.
FHA loans in all 39 states we serve.
MortgagePros is licensed in each state below; license types vary by state and are listed on our Licensing page. FHA rules are federal, so the program works the same wherever you buy. Only the loan limits change.
AL · AR · AZ · CA · CO · CT · DE · FL · GA · IA · ID · IL · IN · KS · KY · LA · MA · MD · ME · MI · MN · MS · MT · NC · ND · NE · NJ · NM · OH · OK · OR · PA · SC · SD · TN · TX · VA · WA · WI
See if you qualify.
Tell us roughly where your credit sits and what you have saved. A licensed pro will tell you honestly whether FHA is your best route, usually the same business day.
Prefer to talk?
248-416-1361
Open 24/7. Ask for an FHA specialist.
You will get both
FHA and conventional priced against each other, including what the mortgage insurance costs over the years you expect to keep the loan. No hard credit pull until you decide to move forward.
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