For a comparison of all major mortgage types — conventional, FHA, VA, USDA, ARM, and jumbo — see the Mortgage Loan Types hub.
FHA loans are government-backed mortgages designed for borrowers with lower credit scores and smaller down payments. They’re the most popular mortgage for first-time home buyers. Here’s everything you need to know.
FHA Loan Requirements at a Glance
| Requirement | FHA Minimum | Typical Lender Minimum |
|---|---|---|
| Credit score (3.5% down) | 580 | 620 |
| Credit score (10% down) | 500 | 580 |
| Down payment | 3.5% (580+ score) or 10% (500-579) | Same |
| Debt-to-income ratio (front-end) | 31% | 31% |
| Debt-to-income ratio (back-end) | 43% | 43-50% with compensating factors |
| Employment history | 2 years steady employment | Same |
| Property type | Primary residence only | Same |
| Occupancy | Must move in within 60 days | Same |
| Upfront mortgage insurance (UFMIP) | 1.75% of loan amount | Same |
| Annual mortgage insurance (MIP) | 0.55% of loan amount | Same |
2026 FHA Loan Limits
| Area Type | Single-Family | Duplex | Triplex | Fourplex |
|---|---|---|---|---|
| Low-cost area (floor) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| High-cost area (ceiling) | $1,249,125 | $1,599,375 | $1,933,200 | $2,402,625 |
FHA Limits by County
FHA limits are set county by county, between the floor and ceiling above. Look up your county’s limit on HUD’s FHA mortgage limits tool before you rely on any number.
FHA Down Payment Details
Down Payment by Home Price
| Home Price | 3.5% Down | 10% Down | Cash Needed (3.5% + Closing Costs) |
|---|---|---|---|
| $200,000 | $7,000 | $20,000 | $13,000-$17,000 |
| $250,000 | $8,750 | $25,000 | $16,250-$21,250 |
| $300,000 | $10,500 | $30,000 | $19,500-$25,500 |
| $350,000 | $12,250 | $35,000 | $22,750-$29,750 |
| $400,000 | $14,000 | $40,000 | $26,000-$34,000 |
| $500,000 | $17,500 | $50,000 | $32,500-$42,500 |
Acceptable Down Payment Sources
| Source | Allowed? | Documentation Needed |
|---|---|---|
| Personal savings | Yes | 2 months bank statements |
| Gift from family | Yes | Gift letter, donor’s bank statement |
| Down payment assistance program | Yes | Program documentation |
| Employer assistance | Yes | Employer letter |
| Government grants | Yes | Grant documentation |
| Borrowed funds (secured) | Yes | Proof of collateral |
| Borrowed funds (unsecured) | No | N/A |
| Cash with no paper trail | No | All funds must be sourced |
FHA Mortgage Insurance Costs
Upfront Mortgage Insurance Premium (UFMIP)
| Loan Amount | UFMIP (1.75%) | If Financed Into Loan |
|---|---|---|
| $200,000 | $3,500 | New loan: $203,500 |
| $250,000 | $4,375 | New loan: $254,375 |
| $300,000 | $5,250 | New loan: $305,250 |
| $400,000 | $7,000 | New loan: $407,000 |
| $500,000 | $8,750 | New loan: $508,750 |
Annual MIP (Monthly Cost)
| Loan Amount | Annual MIP (0.55%) | Monthly MIP Cost |
|---|---|---|
| $200,000 | $1,100 | $92 |
| $250,000 | $1,375 | $115 |
| $300,000 | $1,650 | $138 |
| $400,000 | $2,200 | $183 |
| $500,000 | $2,750 | $229 |
How Long MIP Lasts
| Down Payment | MIP Duration |
|---|---|
| Less than 10% | Life of the loan |
| 10% or more | 11 years |
FHA vs. Conventional Loans
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Minimum credit score | 580 (3.5% down) or 500 (10% down) | 620 (typically 640+) |
| Minimum down payment | 3.5% | 3% (some programs) or 5% |
| Mortgage insurance | Required: UFMIP + annual MIP | PMI required under 20% down |
| MI cancellation | Only with 10%+ down (after 11 years) or refinance | Auto-cancels at 78% LTV |
| Loan limits | $541,287-$1,249,125 | $832,750-$1,249,125 (conforming, 2026) |
| Property standards | Strict FHA appraisal requirements | Standard appraisal |
| DTI limit | 43% (up to 50% with compensating factors) | 43-50% |
| Interest rates | Typically 0.25-0.5% lower than conventional | Varies by credit and LTV |
| Seller concessions | Up to 6% of sale price | 3-9% depending on down payment |
| Assumable? | Yes | No |
Monthly Payment Comparison: $300,000 Home
| Cost | FHA (3.5% Down) | Conventional (5% Down) | Conventional (20% Down) |
|---|---|---|---|
| Down payment | $10,500 | $15,000 | $60,000 |
| Loan amount | $289,500 + UFMIP = $294,566 | $285,000 | $240,000 |
| Interest rate (MND index, Oct. 14, 2026) | 7.13% | 7.45% | 7.45% |
| Principal + interest | $1,986 | $1,983 | $1,670 |
| Mortgage insurance | $135/month (MIP) | $119/month (PMI, assumed) | $0 |
| Total P&I + MI | $2,121 | $2,102 | $1,670 |
| MI cancellation | Never (unless refinance) | At 78% LTV (~8 years) | N/A |
FHA Appraisal Requirements
FHA appraisals are stricter than conventional—the property must meet HUD’s Minimum Property Requirements:
| Requirement | What the Appraiser Checks |
|---|---|
| Structural integrity | Foundation, roof, walls in good condition |
| Safety hazards | No exposed wiring, lead paint (pre-1978 homes), asbestos |
| Adequate heating | Functional heating system |
| Water and sewage | Working plumbing and no leaks |
| Roof condition | At least 2-3 years of remaining life |
| Crawl space access | Must be accessible |
| Handrails | Required on stairs with 3+ steps |
| Chipping/peeling paint | Must be scraped and repainted (pre-1978 homes) |
| Water damage | No active leaks or standing water |
Common FHA Appraisal Issues
| Issue | How to Address |
|---|---|
| Peeling paint (pre-1978 home) | Seller must scrape and repaint |
| Missing handrails | Seller must install before closing |
| Broken windows | Must be repaired |
| Non-functional appliances | Must be repaired or replaced |
| Roof with < 2 years life | May require roof replacement or escrow holdback |
| Foundation cracks | Structural engineer assessment may be needed |
Who Should Get an FHA Loan
| FHA Is Best For | Why |
|---|---|
| First-time buyers with little savings | 3.5% down is among the lowest available |
| Buyers with credit scores 580-679 | Better rates than conventional at this score range |
| Buyers who received down payment as gift | FHA allows 100% gift funds |
| Buyers with past bankruptcy (2+ years ago) | Shorter waiting period than conventional |
| Buyers with past foreclosure (3+ years ago) | Shorter waiting period than conventional |
FHA Might NOT Be Best For
| Situation | Better Option |
|---|---|
| Credit score 720+ | Conventional loan (better rates, cancellable PMI) |
| 10-19% down payment | Conventional (lower PMI, auto-cancels) |
| 20%+ down payment | Conventional (no PMI at all) |
| Investment property | Conventional (FHA is primary residence only) |
| Buying a fixer-upper | FHA 203(k) or conventional renovation loan |
| High-cost property | Jumbo loan if above FHA limits |
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