FHA LOANS

FHA Loan Overview 

An FHA Loan is a government-insured mortgage with flexible credit guidelines and low down payment options—ideal for first-time buyers or borrowers with limited savings. Down payments start as low as 3.5% with a 580+ credit score.

Example: On a $350,000 home with 3.5% down, the loan amount is $337,750 at 6.0% (6.10% APR). With $157/month mortgage insurance, the estimated payment is $2,204 (excluding taxes/insurance).

Key FHA Features  

• Down payment from 3.5% 
• Flexible credit requirements 
• Fixed-rate options 
• Primary residences only 
• Upfront and monthly MIP required

Eligibility Requirements'  

• Steady, verifiable income 
• 580+ credit for 3.5% down (500–579 = 10% down)
  DTI ideally ≤45% (exceptions up to 56%) 
• Must occupy as primary residence 
• Property must meet HUD appraisal standards 
• Waiting periods: 2 years post-bankruptcy, 3 years post-foreclosure

Credit Score & Down Payment 

• 580+ → 3.5% down 
• 500–579 → 10% down 
• Funds may come from savings, gifts, or approved assistance programs.

Debt -to-Income Ratio (DTI)

DTI = monthly debts ÷ gross income
Example: $2,300 ÷ $6,000 = 38.3% DTI 

Mortgage Insurance Premium (MIP)

• Upfront: 1.75% of loan amount
• Annual: 0.45%–1.05% (added monthly)
• MIP remains for the life of the loan unless refinanced into a conventional loan.

Eligible Property Types 

• Single-family homes 
• 2–4 unit properties 
• FHA-approved condos 
• Certain HUD-compliant manufactured homes
  Must fall within local FHA loan limits and pass an FHA appraisal.

How To Apply

Have the following ready:

• Income & employment docs (W-2s, pay stubs, tax returns) 
• Bank/asset statements 
• 2-year residential/work history 
• Credit authorization