FHA loans — an open door for more buyers.
Lower credit and down payment requirements make FHA one of the most accessible paths to homeownership. Here's exactly how it works, including two programs that can make it even more affordable.
Understanding FHA loans, before you apply.
Six things worth knowing up front — no fine print you have to dig for.
Who's Eligible
FHA loans are open to any qualified buyer, not just first-time homebuyers. Credit and income flexibility make it one of the most accessible loan types available.
Down Payment
As little as 3.5% down with a qualifying credit score, and that money can come from savings, a gift, or an approved down payment assistance program.
Mortgage Insurance Premium (MIP)
FHA loans carry an upfront MIP (typically 1.75% of the loan, which can be financed in) plus an annual MIP paid monthly. Unlike conventional PMI, FHA's MIP often lasts for the life of the loan if you put down less than 10%.
Occupancy Rule
Like most government-backed programs, the home must be your primary residence — FHA loans aren't for investment or vacation properties.
The FHA 203(k) Renovation Loan
Similar in spirit to the VA renovation option — this lets you finance a fixer-upper and eligible repairs together in a single loan, one closing, one payment. I financed my own HUD home purchase this way, so I know it firsthand — see how it actually works →
Loan Limits
FHA loans are capped based on your county's cost of living, unlike VA loans which have no cap. I can look up your specific county limit when we talk.
Two programs that can make FHA even more affordable.
Both apply specifically to HUD-owned properties — here's who qualifies and how each one works.
$100 Down Program
For eligible buyers purchasing a HUD-owned (foreclosed FHA) property, the standard 3.5% down payment can be reduced to just $100 at closing.
- Property must be a HUD Real Estate Owned (REO) home
- Home must be your primary residence
- Standard FHA credit and income guidelines still apply
Good Neighbor Next Door
Teachers, law enforcement officers, firefighters, and EMTs can purchase eligible HUD homes in revitalization areas at 50% off the list price.
- Must work full-time in one of the eligible professions
- Home must be in a designated revitalization area
- 3-year owner-occupancy commitment required
FHA Loan Payment & MIP Calculator
See the full picture — principal, interest, MIP, taxes, insurance, and HOA — not just a partial number. This is an estimate for planning purposes; I'll confirm your exact figures together.
Estimated Results
Estimate only, based on the figures you enter. FHA MIP rates are set by HUD and change periodically — I'll confirm your exact rate, term, and eligibility together.
A couple more things worth knowing.
MIP: Upfront vs. Annual, ExplainedHow FHA's mortgage insurance actually works, and when it goes away
Upfront MIP is a one-time charge, typically 1.75% of the loan amount. Most buyers finance it into the loan rather than paying it in cash at closing.
Annual MIP is paid monthly as part of your payment, and how long you pay it depends on your down payment: put down 10% or more and it typically drops off after 11 years; put down less than 10% and it generally lasts for the life of the loan. This is the biggest structural difference from a conventional loan's PMI, which can be removed once you build enough equity.
FHA Loan Myths vs. Facts
Common misconceptions about FHA loans, corrected one at a time — this list grows as new ones come up.
Myth: FHA loans are only for first-time homebuyers
FHA loans are only available to first-time homebuyers, so repeat buyers assume they don't qualify.
Anyone who meets FHA's credit, income, and occupancy requirements can use an FHA loan — there's no first-time buyer requirement. (Some separate down payment assistance programs do require first-time buyer status, which is a different rule from the FHA loan itself.)
Myth: FHA mortgage insurance works just like conventional PMI
FHA mortgage insurance works just like conventional PMI, and drops off automatically once you hit 20% equity.
FHA's annual MIP often lasts the life of the loan if your down payment was under 10% — it doesn't automatically cancel at 20% equity like conventional PMI does. Refinancing into a conventional loan later is often how buyers eventually remove it.
Frequently asked, honestly answered.
What credit score do I need for an FHA loan?
Can I use gift funds for my down payment?
Do I have to be a first-time homebuyer?
What's the difference between the $100 Down Program and Good Neighbor Next Door?
Can I buy a fixer-upper with an FHA loan?
Let's find out if FHA is the right fit.
No pressure, no jargon — just a real conversation about your options.