Did You Know?

Borrowers must meet FHA guidelines to be eligible for FHA-insured mortgages. These requirements are considered more flexible when compared to conventional loans.

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FHA Guidelines

Buying a home can be daunting, which is why it helps to be as informed as possible. Learn all about the FHA loan process and what it takes to get approved.

What Is an FHA Loan?

An FHA loan is insured by the Federal Housing Administration. It comes with low down payments for borrowers and protects lenders from financial risk if the borrower defaults on the loan. Lenders have to meet certain criteria for their mortgages to be termed "FHA-approved," and borrowers must also satisfy a number of requirements to qualify for one of these loans.

FHA Loan Limits

LThe FHA has a maximum loan amount that it will insure, based on county and the property size. These caps, known as the FHA Lending Limits, are updated annually and are influenced by the conventional loan limits set by Fannie Mae and Freddie Mac. FHA loan limits in 2020 range from $331,760 to $765,600.

FHA Credit Requirements

A big selling point for FHA loans is the low credit score requirement. Homebuyers with insufficient credit histories, who find it difficult to qualify for conventional loans with higher minimums, can more easily meet the FHA's minimum credit requirement of a 580 FICO score. Learn about what goes into the make-up of you credit score, and how you can work to increase it.

FHA Closing Costs

As with any mortgage, you'll incur some fees that need to be paid at the closing of your home loan. These charges are collectively called closing costs and they typically amount to 3% of the loan amount. FHA closing costs encompass all the fees and charges owed at the closing of a mortgage, such as appraisal fees, inspection fees, deposit verification fees, and home inspection fees.

FHA Mortgage Insurance (MIP)

In order to continue backing home loans, the FHA collects a monthly Mortgage Insurance Premium. These funds are used to protect the lenders—in that case that FHA borrowers default on their mortgages—and to fund the agency itself. Homebuyers with an FHA loan pay an Upfront Mortgage Insurance Premium, as well as the Monthly Mortgage Insurance Premium.

Debt-to-Income Ratio

It's important that the FHA ensures that borrowers are not signing up for mortgages they cannot reasonably afford, which is why it is mandated that all potential homebuyers' debt-to-income ratios fall within certain set maximums. This helps lower the number of foreclosures since borrowers aren't bound to a mortgage they cannot afford.

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FHA Loan Articles

Buying a Home in 2021 - It's a Seller's Market

No matter what kind of market you’re in, it is always best to get pre-approved before going to shop for houses. The last thing you want is to go look at homes, find the one you love, then have to wait on an approval and lose the dream home to another buyer.

FHA Programs for Fixer-Upper Homes

The fact is that repairs and renovations to your home cost a lot of money. Luckily, the FHA has an option for those with fixer-uppers on their hands. The FHA 203(k) Rehabilitation Mortgages allows borrowers to finance the funds for renovations to a home.

What Your Credit Score Says About You

Credit scores tend to be a source of anxiety for many Americans, because they realize the weight they hold when it comes to getting a loan for nearly anything. Taking the mystery out of this 3-digit number goes a long way to helping people understand and increasing their score.

Streamline Your FHA Loan Refinance

With the trend of falling interest rates since 2019, the number of mortgage refinances around the country has spiked and continues to rise. Borrowers with FHA loans can also capitalize on the low rates, but it may be possible to simplify the process with the FHA Streamline Refinance.

Planning and Saving for a New Home

There are tons of reasons why people decide that they’re done with renting and start looking into buying a home. Whatever your reason, deciding to buy a home is a big step, and one of the most daunting aspects is saving up enough money for the down payment.

How to Get Credit-Ready for a Mortgage

The FHA helps first-time and low-income homebuyers by having lower down payment requirements for its borrowers. Despite this lower credit eligibility criteria set by FHA, it is important to remember that FHA-approved lenders can set their own requirements


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