top of page

Acerca de

FHA Loans

Backed by the Federal Housing Administration, these types of home loans help make homeownership possible for borrowers who don’t have a large down payment saved up or don’t have pristine credit. 


Borrowers need a minimum FICO score of 580 to get the FHA maximum of 96.5 percent financing with a 3.5 percent down payment; however, a score of 500 is accepted if you put at least 10 percent down. FHA loans require two mortgage insurance premiums: one is paid upfront, and the other is paid annually for the life of the loan if you put less than 10 percent down, which can increase the overall cost of your mortgage. Lastly, with an FHA loan, the home seller is allowed to contribute to closing costs.


Pros FHA loans

Help you finance a home when you don’t qualify for a conventional loan.

Credit requirements are more relaxed. Credit scores as low as 500.

Don’t need a large down payment. Can be as low as 3.5%.

Available to repeat and first-time buyers.


Cons of FHA loans

Mandatory mortgage insurance premiums on FHA loans that cannot be canceled unless refinancing into a conventional mortgage.

Loan limits on FHA loans are lower than conventional mortgages in most areas, limiting potential inventory to choose from.

Borrower must live in the property (although you may be able to finance a multi-unit building and rent out other units).

Could have higher overall borrowing costs.

Expect to provide more documentation, depending on the loan type, to prove eligibility.


Who should get an FHA loan?

If you cannot qualify for a conventional loan due to a lower credit score or limited savings for a down payment, FHA-backed loans are a great option.

bottom of page