FHA Home Loan – The First-Time Buyer’s Best Friend
With low down payments (as little as 3.5%) and flexible credit requirements, the FHA loan is perfect for first-time buyers or those with less-than-perfect credit. The catch? You’ll pay mortgage insurance (PMI).
Best for: First-time homebuyers & low-credit borrowers.
- Pros:
- Easier to qualify for with low credit scores
- Down payments as low as 3.5%
- Cons:
- Requires mortgage insurance (PMI) for the life of the loan
- Loan limits vary by location
FHA Loans: Making Homeownership More Accessible
The Federal Housing Administration (FHA) was created in 1934 during the Great Depression to help more Americans afford homeownership, boost home construction, and stabilize the housing market. Instead of lending money directly, FHA insures loans made by approved banks and mortgage lenders.
Because of this government-backed insurance, FHA loans allow borrowers to qualify with lower credit scores, smaller down payments, and more flexible financial requirements than conventional loans.
How FHA Loans Work
FHA does NOT lend money—it just insures loans made by banks & lenders. Borrowers pay an insurance premium to protect lenders from default. FHA loans make homeownership more accessible, especially for first-time buyers & lower-income borrowers.
FHA also offers loans for condos, home renovations, and reverse mortgages.
FHA Loan Programs & What They Offer
FHA Section 203(b) – The Standard FHA Loan
Most common FHA loan for single-family homes
Can be used for 1-4 unit properties
Flexible credit requirements (typically 580+ for 3.5% down)
Low down payment (3.5%), which can come from a gift
FHA Section 234(c) – FHA for Condos
Provides mortgage insurance for condo units
Same credit & down payment requirements as 203(b)
Condo must be FHA-approved (check via HUD’s condo list)
FHA Section 203(k) – The Rehab Loan
Combines a home loan & renovation loan into ONE mortgage
Great for fixer-uppers & community revitalization
Covers energy-efficient upgrades & safety improvements
Eligible for 1-4 unit properties & some condos
Requires a consultant for major renovations
Why It’s Popular: Instead of getting a second loan to renovate, you can roll repair costs into your mortgage!
HECM – Reverse Mortgages (For Seniors 62+)
Allows homeowners 62+ to access their home’s equity
Payments can be lump sum, monthly, line of credit, or a mix
No monthly mortgage payments (homeowner still pays taxes & insurance)
FHA was the first agency to promote reverse mortgages nationally
More FHA Programs to Know
FHA offers more than just home purchase loans:
FHA Streamline Refinance – Quick refinancing with less paperwork & no appraisal
FHA Streamline 203(k) – Simplified version of the 203(k) for smaller home repairs
Making Home Affordable Program – Incentives for loan modifications & refinancing
Why Consider an FHA Loan?
FHA loans are designed to make homeownership more affordable & accessible with:
Lower down payments (as low as 3.5%)
Higher loan limits than before
30-year fixed repayment terms
More flexible credit & income requirements
If you’re a first-time homebuyer or someone looking for affordable financing, an FHA loan might be a great fit!
Want to see if you qualify? Let’s talk!
Frequently Asked FHA Questions:
What are the credit requirements for most FHA lenders?
580+ → Eligible for 3.5% down payment (most common FHA requirement)
500-579 → Requires 10% down payment
Below 500 → Generally not eligible for an FHA loan
While 580 is the standard for most lenders, some may require a higher score (620-640) based on their own guidelines (aka lender overlays).
How much can I afford?
By providing your mortgage professional the required documentation, a detailed analysis will be provided that includes your maximum loan amount
How will I know if the condo/townhome I want to buy is eligible for FHA financing?
The following link will allow you to enter your zip code for a list of eligible properties: CLICK HERE