Home financing · Future Home Loans
FHA Loans
A home of your own.
Options you can understand.
Closing costs and prepaid expenses are additional.
Lenders may require a higher credit score.
Generally, you must live in the property.
Compare your payment, cash to close, and total costs.
Understand your options
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration and made by an approved lender. FHA insurance helps eligible borrowers access home financing with a lower down payment and flexible credit guidelines. FHA purchase loans can be available to both first-time and repeat homebuyers.
Consider total costs
FHA rates and total borrowing costs
Your FHA rate depends on your credit profile, loan amount, loan term, lender pricing, and current market conditions. Compare the interest rate, annual percentage rate (APR), mortgage insurance, closing costs, and cash to close. A lower advertised rate alone does not tell you which loan costs less. Ask your FHL broker for a quote based on your situation.
Start with the essentials
FHA loan requirements
| Requirement | What it means for you |
|---|---|
| Minimum credit score | FHA policy allows a 3.5% down payment with a score of 580 or higher. Scores of 500–579 require at least 10% down under FHA policy. Lenders may require higher scores; your FHL broker will confirm the programs available for your situation. |
| Minimum down payment | As low as 3.5% for eligible borrowers. Closing costs and prepaid expenses are additional. Eligible gifts or approved assistance may help cover some of the required funds. |
| Loan-to-value (LTV) | Up to 96.5% for an eligible purchase before financed upfront mortgage insurance. Separate down-payment assistance does not turn the FHA first mortgage into a 100% LTV loan. |
| Debt-to-income ratio (DTI) | DTI compares your monthly debt payments, including the proposed housing payment, with qualifying monthly income. Approval depends on automated or manual underwriting, your overall finances, and lender requirements; there is no single maximum that applies to every borrower. |
Look beyond the interest rate
FHA mortgage insurance and closing costs
Of the base loan amount on most FHA purchase loans. Annual mortgage insurance is additional.
Most FHA purchase loans include upfront mortgage insurance of 1.75% of the base loan amount and an annual mortgage insurance premium collected with the monthly payment. The annual premium varies with the loan amount, term, and loan-to-value ratio.
The upfront premium can generally be financed. That increases the loan balance and the interest paid over time. Mortgage insurance protects the lender, rather than the borrower.
For most current FHA loans, annual mortgage insurance lasts 11 years when the original LTV is 90% or less, or for the mortgage term when the original LTV is above 90%, unless the loan is paid off sooner. It does not automatically disappear when your home reaches 20% equity.
Your estimated payment should also account for principal and interest, property taxes, homeowners insurance, and any applicable HOA dues. Closing costs and prepaid expenses are separate from the down payment.
Make an informed choice
FHA versus conventional:
compare your options
| Consideration | FHA | Conventional |
|---|---|---|
| Down payment | As low as 3.5% for eligible borrowers. | Some programs allow as little as 3% for eligible borrowers. |
| Credit profile | May provide a path for borrowers with lower credit scores; lender requirements still apply. | Pricing and eligibility depend on credit, down payment, and the specific program. |
| Mortgage insurance | Usually includes an upfront premium and an annual premium paid monthly. | Private mortgage insurance is generally required with less than 20% down and can be canceled when applicable requirements are met. |
| Best way to decide | Compare lender quotes for the same purchase price, down payment, loan term, and lock period. Review cash to close, monthly payment, APR, and costs over the time you expect to keep the loan. | |
Your broker can help compare both options. The lowest interest rate does not always produce the lowest total cost.
Your location matters
FHA loan limits
for 2026
FHA loan limits depend on the property’s county, number of units, and the year the FHA case number is assigned. For 2026, the national one-unit limit ranges from $541,287 in low-cost areas to $1,249,125 in high-cost areas; your county’s limit may fall between those amounts.
Check the property location before assuming a limit applies. Use HUD’s FHA Mortgage Limits lookup or read our mortgage loan limits guide. Ask your broker to confirm the applicable limit for your purchase.
Picture your next home
What homes qualify
for an FHA loan?
- Single-family homes and townhomes that meet FHA property standards.
- Eligible condominium units, including FHA-approved projects and units eligible for single-unit approval.
- Eligible two-to-four-unit properties when you occupy one unit. Additional rules apply to three- and four-unit properties.
- Eligible manufactured homes that meet applicable FHA and lender requirements.
An FHA appraisal evaluates value and minimum property requirements; it does not replace an independent home inspection.
Borrower eligibility
Who can qualify for an FHA loan?
Eligible borrowers include U.S. citizens and lawful permanent residents who meet FHA requirements. HUD also provides eligibility for citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. Other non-permanent resident borrowers are not eligible under the current FHA policy. Your lender must verify the applicable documentation.You must meet credit, income, debt, and other underwriting requirements and generally occupy the property as your primary residence. Residual income may be considered in applicable manual-underwriting situations; it is not a blanket requirement for every FHA purchase borrower.
A clearer path forward
How to get started
- 01Connect with a broker
Connect with an FHL broker to review your goals, state, purchase budget, and financing options.
- 02Review your finances
Provide the requested income, credit, asset, and identification information for a pre-approval review.
- 03Compare your options
Compare FHA and conventional options, including mortgage insurance, estimated payment, and cash to close.
- 04Find your home
Once you have a property under contract, the lender reviews the home, appraisal, and complete application.
- 05Complete lender review
Final approval depends on satisfying the lender’s conditions. A pre-approval does not guarantee final approval.
A broker in your corner
How FHL helps you compare FHA options
Your goals. Your finances.
A comparison that fits your situation.
FHA sets program rules, while individual lenders can apply additional requirements. That means two lenders may evaluate the same borrower differently. As a mortgage broker, FHL helps you compare financing options available for your situation.
A useful comparison starts with your credit profile, savings, monthly obligations, and expected time in the home. We help you understand the trade-offs between the cash needed at closing, monthly mortgage insurance, and the overall payment.
Buying in Jacksonville or elsewhere in Florida? Your property’s county and the available lender programs matter. FHL also serves borrowers in its other licensed states. Find a broker licensed in your state to discuss your options.
Get a clearer picture
FHA loan questions
Do I have to be a first-time homebuyer?
No. FHA purchase financing can be available to eligible first-time and repeat buyers. The home generally must be your primary residence, and you must meet the applicable borrower, property, and lender requirements.
Can I use gift funds for my down payment?
Eligible gift funds may be used when the donor and funds meet FHA requirements. Your lender will verify the source, document the transfer, and require a gift letter confirming that repayment is not expected. Discuss the gift with your broker before moving funds.
Can down-payment assistance help with an FHA loan?
An eligible assistance program may help cover the required down payment or closing costs. Assistance has its own income, location, property, and repayment rules. Your broker must confirm that the assistance and FHA lender program work together.
Can I buy a two-to-four-unit property with FHA?
Eligible two-to-four-unit properties may qualify when you occupy one unit as your primary residence. Additional property and underwriting rules apply, including self-sufficiency requirements for three- and four-unit properties. FHA purchase loans are generally not for a property you will use only as an investment.
Is FHA always cheaper than a conventional loan?
No. The better option depends on your credit, down payment, lender pricing, mortgage insurance, and how long you expect to keep the loan. Compare both options using the same assumptions and include total borrowing costs, rather than comparing the interest rate alone.
Sources and program information
Mortgage guidance from Future Home Loans · Updated .
Program information is based on HUD’s FHA Handbook 4000.1, HUD’s mortgage insurance guidance, HUD’s current loan limits, and the CFPB’s FHA loan guide. Eligibility, lender requirements, and program availability can change. This information is general guidance; a loan approval requires review of your application and property.
Your next step
Ready to Move Forward?
Ready to explore an FHA loan? Start your pre-approval or connect with a broker who can compare the options available for your goals.